MSME stands for Micro, Small and Medium Enterprises. MSME plays a pivotal role in the growth of Indian economy which is majorly dependent upon agriculture and small business. MSME being the backbone of the economy is highly supported by the government. The government of India provides various subsidies, schemes & incentives to MSME’s through Micro, Small & Medium Enterprises Development (MSMED) Act.

To avail various benefits, incentives, schemes, and subsidies granted by the government to MSME, entrepreneurs need to register themselves as MSME under MSMED Act. The registration is called MSME/SSI/Udyog Aadhar Registration.

MSME are classified into 2 classes- Manufacturing and Service Enterprises. The limit for investment in plant and machinery / equipment for manufacturing / service enterprises are as under:

Type of EnterpriseManufacturing EnterprisesService Enterprises
Investment in Plant & MachineryInvestment in Plant & Machinery
Micro EnterprisesDoes not exceed 25 lakhsDoes not exceed 10 lakhs
Small EnterprisesMore than 25 lakhs but does not exceed 5 croresMore than 10 lakhs but does not exceed 2 crores
Medium EnterprisesMore than 5 crores but does not exceed 10 croresMore than 2 crores but does not exceed 5 crores

Benefits of MSME Registration

  • Easy access to credit
  • Cheaper bank loans
  • Tax Exemptions
  • Opportunities to participate in exhibitions abroad
  • Capital Investment subsidies
  • Power tariff subsidies
  • Priority sector lending