MSME or Micro, Small and Medium Enterprises is a category defined by the Government of India and RBI for enterprises that need special support in terms of finance, infrastructure and other areas. The reason for this lies in the fact that this sector is the second largest employer in the country, right after agriculture. Moreover, these enterprises cater to niche manufacturing and service requirements of the society and corporate environment. The government has provided clear guidelines for enterprises falling in this category.
As per the Micro, Small, and Medium Enterprises (MSME) Development Act 2006, these businesses are classified in two categories, service enterprises and manufacturing enterprises.
- Service Enterprises: The enterprises engaged in providing services come under this category.
Enterprises Investment in Equipment Micro Does not exceed the limit of Rs. 10 lakh Small More than Rs. 10 lakh and up to Rs. 2 crore Medium More than Rs. 2 Crore and up to Rs. 5 crore
- Manufacturing Enterprises: Enterprises that are engaged in manufacturing or production of goods come under this category. In addition, enterprises that aid in finishing processes to get to the final product for any business are considered as manufacturing enterprises.
Enterprises Investment in Equipment Micro Does not Exceed the Limit of Rs. 25 lakh Small More than Rs. 25 lakh and Up to Rs. 5 Crore Medium More than Rs. 5 Crore and Up to Rs. 10 Crore