Govt Changes MSME Definition To Benefit Businesses: Scales Up Investment Limit, Clubs Manufacturing, Service Sector 

Finance Minister Nirmala Sitharaman in her press address on Wednesday (13 May) revised the criteria to define a MSME in favour of the businesses.

As part of the reforms, investment limit for MSMEs has revised upwards so that the business will be encouraged to continued growing, while not losing their MSME criteria. Different criteria for manufacturing and service enterprises have also been done away with.

As per the revised MSME classification, enterprises in both manufacturing and service sector will be defined as “Micro” if they have an investment up to Rs 1 crore and turnover up to Rs 5 crore.

Earlier enterprises could only be defined as Micro if they had an investment up to Rs 25 lakh and Rs 10 lakh in manufacturing and service sector respectively.

Both manufacturing and service enterprises can be classified as “Small” if they have investment up to Rs 10 crore and turnover up to Rs 50 crore respectively. Medium manufacturing and service enterprises will be allowed an investment up to Rs 20 crore and turnover up to Rs 100 crore.