Definitions

Role of MSMEsDefinitions

Global trends in classifying the MSMEs show that it widely differs across jurisdictions and depends upon the government policies of the country. Though, a comparison of some of the countries revealed that most of them are using number of employees as a variable to define MSMEs, in India, MSMEs are presently defined based on investment in plant and machinery / equipment and annual turnover base growth.

To facilitate ease of doing business, the Government has introduced the new criteria from 1st July 2020 for classification of MSMEs.

Revised Classification applicable w.e.f 1st July 2020

Classification of Micro, Small and Medium Enterprise (MSME) sector


Composite Criteria Investment in Plant & Machinery/equipment and Annual Turnover


Classification




Manufacturing and Service Sector Enterprises



Micro

Investment in Plant and Machinery or Equipment upto Rs.1 crore

and

Annual Turnover does not exceed Rs. 5 crore

Small

Investment in Plant and Machinery or Equipment upto Rs.10 crore

and

Annual Turnover does not exceed Rs. 50 crore

Medium

Investment in Plant and Machinery or Equipment upto Rs.50 crore

and

Annual Turnover does not exceed Rs. 250 crore