MSME stands for Micro, Small and Medium Enterprises and such other enterprises which falls under these three categories. MSME’s are the backbone of the Indian economy as it provides employment to a large number of youth. As per Confederation of Indian Industry (CII) MSME sector has created 13.5 million to 14.9 million new jobs. It is an optional Registration under the MSMED Act that provides Micro, Small and Medium sized enterprises with lots of benefits of Central or State Government Schemes, Subsidies, credit and loan facilities and other incentives.

MSME have two categories –

  1. Manufacturing Enterprises
  2. Service Enterprises.


Sr. NoTypeInvestment in Manufacturing Sector (Rs.)Investment in equipment in Service Sector ( Rs.)
1MICROLess than 25 LakhsLess than 10 Lakhs
2SMALL25 Lakhs to 5 Crores10 Lakhs to 2 Crores
3MEDIUM5 Crores to 10 Crores1 Crore to 5 Crores

Reasons for Registration:

  1. Various Subsidies by Government on Import and Export consideration.
  2. Subsidies on Transport, Capital Investment, Industrial Housing.
  3. Business registered under MSME grants special incentives to women entrepreneurs, non-resident enterprises
  4. Lower rate of interest on loans for MSME sector.
  5. MSME registered enterprises receive exemption from Income tax, Property tax, Sales Tax, payment of stamp duty.
  6. The 2019 Budget announced that MSMEs registered with GST can get loans of up to
    1 Crore with 2% interest on fresh or incremental loan within 59 minutes.