Quick Summary
MSME classification determines eligibility for various government schemes, subsidies, and priority lending.
MSME stands for Micro, Small and Medium Enterprises. The classification is based on investment in plant & machinery/equipment and annual turnover as per the revised definition effective July 1, 2020.
Classification Criteria (Revised 2020)
| Category | Manufacturing - Investment | Services - Investment | Turnover |
|---|---|---|---|
| Micro | Up to ₹1 crore | Up to ₹1 crore | Up to ₹5 crore |
| Small | Up to ₹10 crore | Up to ₹10 crore | Up to ₹50 crore |
| Medium | Up to ₹50 crore | Up to ₹50 crore | Up to ₹250 crore |
Benefits of MSME Registration (Udyam)
- Collateral-free loans: Under CGTMSE scheme
- Lower interest rates: Priority sector lending
- Tax benefits: Various exemptions and subsidies
- Government tenders: Exclusive quota in procurement
- Delayed payment protection: Interest on late payments
- Patent and trademark subsidy: Reimbursement of fees
- ISO certification reimbursement: Financial support
- Electricity bill concession: In some states
Key Points
- Revised criteria from July 2020
- Investment + Turnover criteria
- No distinction between manufacturing and services now
- Udyam registration required for benefits
- Collateral-free loans available
- Priority in government tenders