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BlogWhat is MSME and New definitions of MSMEs in India

What is MSME and New definitions of MSMEs in India

After the huge loss in the economy of India new definition of MSMEs is given by the government. It is done to make a revamp in the economic conditions of the MSMEs. The MSMEs stands for- Micro, Small, and medium enterprises. All categories are divided on the basis of their investment. Earlier it has a different limit but now it has been changed in the lockdown 3.O. So let us have a brief view about them.

According to new definition-

Microenterprise– An enterprise that has a maximum turnover for a year is under 5 crores then it will be called micro-enterprise and can avail the benefits of micro-enterprises from the government.

Small enterprises– The enterprise which has a maximum turnover of more than 5 crores but less than 75 crores for a year are categorized under small enterprises and can avail the benefits of small enterprises from the government have to follow the specific rules.

Medium enterprises– These are the enterprises that have a yearly turnover of more than 75 crores but less than 250 crores. These enterprises can avail of the benefits which are for the medium enterprises and can have take loans according to their limit followed by the government.

A person working in a factory | New definition of MSMEs
A person working in a factory | New definition of MSMEs | Image Source DNA India

Why this new definition

Changing the parameter of the MSMEs will help many more enterprises to avail of the loan and investment facility in them from the government. So this is a good move. It will also provoke unregistered MSMEs to do registration and the limit of GST filing date is increased.

Well, after the lockdown started the most affected enterprises are these because they don’t have much back up for a long time to follow the lockdown but the lockdown was implemented compulsorily by the government so these enterprises got heavily affected and there was a huge chance for their bind up. So, to revamp them with strong support from the government is required.

The other thing is that the new policy of the government or you can say the new ideas to promote the local enterprises it was necessary to emerge these enterprises so that local production can avail more and more. The start of the “ATMNIRBHAR BHARAT” journey can only rich the zenith by improving this sector and also to provide employment and branding the local market internationally this definition or change in parameter was very important.

It can be said as the perfect move of the government to improve its condition. Now they can get loans in more amounts and also their investment criteria will change which is a good chance for the sector.

Effects and pros

In today’s time there are over 61 lakhs registered MSMEs in India and they are a very important source of employment at the local level. A huge number of people rely on it for employment. The production at the local level is totally based on it or it can be also said that the Modi MANTRA for local ko vocal can only be achieved by this.

So, this is the analysis of the topic of MSMEs’ new definition. If the move of the government gets success then it will play an effective role in the local production of India and will help to attain the “ATMNIRBHAR BHARAT ABHIYAN”. We hope for the best. If you have any suggestions or idea then please mention it in the comment box.

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