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. No Type Investment in Manufacturing Sector (Rs.) Investment in equipment in Service Sector ( Rs.)
1 MICRO Less than 25 Lakhs Less than 10 Lakhs
2 SMALL 25 Lakhs to 5 Crores 10 Lakhs to 2 Crores
3 MEDIUM 5 Crores to 10 Crores 1 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.