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What is MSME? How are they defined

Mar 26, 2019, 16:56 PM IST
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Micro-Small and Medium Enterprises (MSMEs) are small sized or small scale business entities that are classified as per their size of investments. These small and medium business entities contribute to employment, production, export, innovation, technology, social development of the economy of the country. They contribute a significant part in the economy by generating employment of unskilled and semi-skilled population, playing role in exports of goods and services, increasing the production in manufacturing sector and acting as a support to large industries by supplying raw material, basic goods, finished parts and components. The MSMEs are classified with respect of investments in plant and machinery, in case they operate in the manufacturing sector, and on investment in equipment in case of operations in service sector. 

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MSMED was enacted in 2006

MSMED was enacted in 2006

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under. (PTI)

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Micro Enterprise

Micro Enterprise

A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh (PTI)

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Small Enterprise

Small Enterprise

A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore. (Reuters)

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Medium Enterprise

Medium Enterprise

A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs. 5 crore but does not exceed Rs.10 crore. (PTI)

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Investments of enterprises in equipment

Investments of enterprises in equipment

Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006) are specified below. (Reuters)

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Micro Enterprise

Micro Enterprise

A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh. (Reuters)

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Small Enterprise

Small Enterprise

A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore. (Reuters)

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Medium Enterprise

Medium Enterprise

A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore. (Reuters)

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