Definition of MSME

Definition of Micro, Small & Medium Enterprises

In accordance with the provision of Micro, Small & Medium Enterprises Development MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951). The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.

(b) Service Enterprises : The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under: 

Manufacturing Sector

Enterprises

 Investment in plant & machinery

Micro Enterprises

Does not exceed twenty five lakh rupees

Small Enterprises

More than twenty five lakh rupees but does not exceed five crore rupees

Medium Enterprises

More than five crore rupees but does not exceed ten  crore rupees

Service Sector

Enterprises

 Investment in equipments

Micro Enterprises

 Does not exceed ten lakh rupees:

Small Enterprises

More than  ten lakh rupees but does not exceed two crore rupees

Medium Enterprises

More than two crore rupees but does not exceed five core rupees

Challenges to MSME

Small and Medium Enterprises (SMEs) play a vital role for the growth of Indian economy by contributing 45% of industrial output, 40% of exports, employing 60 million people, create 1.3 million jobs every year and produce more than 8000 quality products for the Indian and international markets. SME’s Contribution towards GDP in 2011 was 17% which is expected to increase to 22% by 2012. There are approximately 30 million MSME Units in India and 12 million persons are expected to join the workforce in the next 3 years. 

Despite of the importance of the MSMEs in Indian economic growth, the sector is facing challenges and does not get the required support from the concerned Government Departments, Banks, Financial Institutions and Corporates which is proving to be a hurdle in the growth path of the MSMEs. The list of the problems that are faced by existing/new companies in SME sector are as under:

1. Absence of adequate and timely banking finance
2. Limited capital and knowledge
3. Non-availability of suitable technology
4. Low production capacity
5. Ineffective marketing strategy
6. Constraints on modernisation & expansions
7. Non availability of skilled labour at affordable cost
8. Follow up with various government agencies to resolve problems due to lack of man power and knowledge etc.

It is very important to empower the SME sector to utilize the limited resources (human & economic) they have in an optimum manner. The SMEs need to be educated and informed of the latest developments taking place globally and helped to acquire skills necessary to keep pace with the global developments. SMEs are now exposed to greater opportunities than ever for expansion and diversification across the sectors. Indian market is growing rapidly and Indian entrepreneurs are making remarkable progress in various Industries like Manufacturing, Precision Engineering Design, Food Processing, Pharmaceutical, Textile & Garments, Retail, IT and ITES, Agro and Service sector.

To counter the challenges faced by SME sector and grab the opportunities in the market, the Chamber has developed key strategies to promote and support the SME sector. The Chamber encourages SMEs to adopt innovative ideas and concepts for the promotion of their business. The goal of the Chamber is to organise Seminars, Conferences, Workshops and Training Programs and other trade promotional activities to educate & create awareness amongst the SMEs. CIMSME has decided to start various activities to empower and educate the SME Sector by organising various trade promotional activities.

Registration of MSME

GENERAL INSTRUCTIONS
MEMORANDUM IS TO BE FILED WITH THE DISTRICT INDUSTRIES CENTRE*, BY A MICRO, SMALL OR MEDIUM ENTERPRISE, AS THE CASE MAY BE, UNDER SUBSECTION (1) OF SECTION 8 OF THE MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT (MSMED) ACT, 2006.

  • THREE COPIES OF MEMORANDUM FOR MICRO AND SMALL ENTERPRISES AND FOUR COPIES FOR MEDIUM ENTERPRISES SHOULD BE FILED
  • THERE IS NO FEE FOR PROCESSING THE MEMORANDUM.
  • EXISTING UNITS SHOULD FILL UP ONLY PART II OF THE MEMORANDUM.
  • IN CASE OF ANY CHANGE IN THE INFORMATION, AT ANY POINT OF TIME, PLEASE INFORM THE DETAILS WITHIN THREE MONTH TO DIC.
  • WRITE / TYPE IN BLOCK (CAPITAL) LETTERS
  • LEAVE ONE BLANK BOX AFTER EACH WORD.
  • FILL UP WHICHEVER IS APPLICABLE.
  • ALL CODES OTHER THAN PIN CODE SHALL BE FILLED BY THE OFFICE.
  • FORM WILL BE MACHINE NUMBERED BY THE DISTRICT INDUSTRIES CENTRE.       download form 

MSME Act

Micro Small and Medium Enterprises Development Act, 2006 became operational w.e.f. 2nd October 2006. The Act replaces the concept of “Industry” with “Enterprises”. This Act facilitates the promotion, development and enhances the competitiveness of Micro, Small and Medium Enterprises and for matters connected therewith or incidental thereto.     msme act download