Government of India has enacted the Micro, Small and Medium Enterprises Development Act, 2006 (“Act”) that seeks to extend policy support for MSMEs.
Micro, Small and Medium Enterprise (MSME) sector is the most significant sector of the Indian economy after agriculture. To achieve the target of India becoming a $5 trillion economy growth and development of MSME sector is critical. As per the National Sample Survey 2015-16, MSME sector created more than 11 crore jobs.
MSME Definition
Government of India has enacted the Micro, Small and Medium Enterprises Development Act, 2006 (“Act”) that seeks to extend policy support for MSMEs. It should be noted that under the Act, the term “Enterprise” includes both manufacturing and services enterprises and categorises them based on the value of plant and machinery and cost of equipment. Enterprises engaged in the manufacture or production, processing or preservation of goods where investment in plant and machinery does not exceed Rs 25 lakh are micro-enterprises; a small enterprise is an enterprise where the investment in plant and machinery is more than Rs 25 lakh but does not exceed Rs 5 crore; and a medium enterprise is an enterprise where the investment in plant and machinery is more than Rs 5 crore but does not exceed Rs 10 crore.
Source: Financial Express
