MSME is Micro, Small and Medium Enterprise. MSME is enacted by The Government of India under (MSMED) Act, 2006. They are small size entities defined in terms of their investment. The Micro, Small & Medium Enterprises (MSME) are classified in two Classes:
Under the central Government program ‘Atmanirbhar Bharat Abhiyan’, the Government has introduced revisions in the definition of Micro, Small and Medium Enterprises (MSME). The modifications became effective from 1st July, 2020. Earlier, the criteria for manufacturing units and service units were different. Now Manufacturing and Service enterprises are defined under the same terms as under. They are defined in terms of their investment and turnover.
Micro Unit: An
MSMEs will now be called Micro unit, if it has investments upto Rs 1 crore and turnover of less than Rs 5 crore.
Small Unit: An MSME to be defined as a Small unit, if it’s investment is from Rs 5 crore to Rs 10 crore with a turnover of less than 50 crore.
Medium Unit: An MSME to be classified as a Medium unit, if it’s of investments up to Rs 20 crore and a turnover of less than Rs 100 crore.