MSME (Micro, Small and Medium Enterprises) represents all businesses which falls under the limit of micro, small and medium enterprise and are encouraged by the Indian government as it acts as stepping stones for developing the economy by contributing greatly to the country’s GDP.
In a micro enterprise, the investment of plant and machinery should not exceed Rs. 25 lakhs. In a small enterprise, the investment of plant and machinery should be more than 25 lakhs but should not exceed Rs. 5 crores. In a medium enterprise, the investment of plant and machinery should be more than 5 crores but should not exceed Rs. 10 crores. These are the limit for MSME India if it is involved in manufacturing or production of goods without the cost of land and building. If the MSME is involved in supplying services then the investment in micro enterprise should not be more than 10 lakhs, small enterprise should be more than 10 lakhs but should not be more than 2 crores and medium enterprise should be more than 2 crore but should not be more than 5 crore.
MSME is openly promoted by the Indian government under the Micro, Small and Medium Enterprises Development (MSMED), Act 2006. The purpose of the government to boost MSME enterprise will only serve if the enterprise register itself for it. There are various benefits and schemes introduced under MSMED Act to safeguard and grow Micro, Small and Medium enterprise which are as follows-
Priority from Bank: If a business is registered under MSME then various Banks provide utmost benefit to them in terms of credits, loans, overdrafts and other facilities. Many banks provide collateral free loan, very low interest loan at about 1- 1.5% and benefits on overdraft which other businesses may not get.
Concession on Electricity Bill: All businesses registered under MSME can avail concession on electricity bill. It encourages them to produce more output and helps them survive in the contemporary market. Various other concession can be availed by showing the certification of MSME to the appropriate department.
Access to government schemes and benefits: MSMEs can access various government schemes and benefits, such as subsidies, tax exemptions, and financial assistance. The government offers these schemes to promote the growth of small businesses and boost the economy
Subsidy on Patent registration: MSME can avail the benefits of subsidy on Patent registration which will help them encourage to be more innovative and creative in their respective fields. Any subsidy can be availed by submitting necessary application along with MSME registration certificate to the respective department.
Reimbursement of ISO certification charges: The charges made to get ISO certification can be reimbursed to the entrepreneur to help them spread their business across borders and maintain quality as per required standards.
Technological and skill development: The government provides various schemes to promote technological and skill development in MSMEs. The schemes provide financial assistance for training, upgradation of technology, and adoption of new practices.
Eligibility for Industrial promotion subsidy: As per the Indian government MSMEs are eligible to avail subsidy for promotion of their industries. It helps them place their identity in a competitive market.
Benefits of various scheme: MSMEs can also avail the benefits of various schemes guaranteed by the Indian government such as Credit guarantee scheme, Public procurement policy, Protection against delayed payment, Credit linked subsidy scheme, Exemption scheme from Direct tax, etc by the government.
As the government has put forth various initiative to help boost micro, small and medium enterprises, it will only be useful if MSME registration is done. The cost of MSME registration is also comparatively low from other entities. MSME registration online can be done through Udyam/MSME portal or by connecting with MyEfilings to have a seamless process.