Author- admin
Date:April 5, 2023
What all business comes under MSME?
MSME Law Notes by NB Associates
MSMEs (Micro, Small and Medium Enterprises) are an important sector of the Indian economy. These enterprises contribute significantly to the country’s employment and GDP.
The Government of India has been implementing various schemes and policies to promote and support the growth of MSMEs.
In this law notes, we will enumerate What all business comes under MSME?
There are three kinds of businesses which come under MSME:
1. Micro-enterprises
2. Small enterprises
3. Medium enterprises
Micro Enterprises are the smallest of all enterprises.
These enterprises are characterized by low investment in plant and machinery and a small number of employees.
As per the MSME Act 2006, a micro-enterprise is one where the investment in plant and machinery does not exceed Rs. 1 crore and turnover does not exceed Rs. 5 crore.
1. Food and Beverage Industry: Small food and beverage outlets such as tea shops, snack bars, and bakeries come under the category of micro-enterprises. These businesses require low investment in machinery and can be set up with limited resources.
2. Textile and Garment Industry: Small tailoring shops, embroidery units, and weaving units are some examples of micro-enterprises in the textile and garment industry. These businesses are typically set up in small towns and rural areas where labour is abundant.
3. Agro-based Industries: Small units involved in the processing of agricultural products such as oil mills, rice mills, and spice processing units come under the category of micro-enterprises. These businesses are essential for the development of rural areas.
Small enterprises are slightly larger than micro-enterprises.
These enterprises require a higher investment in plant and machinery and employ more people.
As per the MSME Act 2006, a small enterprise is one where the investment in plant and machinery does not exceed Rs. 10 crores and turnover does not exceed Rs. 50 crore.
1. Chemical Industry: Small units involved in the production of chemicals and fertilizers come under the category of small enterprises. These businesses require a higher investment in plant and machinery as well as skilled labour.
2. Engineering Industry: Small units involved in the production of machinery, tools, and equipment come under the category of small enterprises. These businesses require skilled labour and a higher investment in machinery.
3. Leather Industry: Small units involved in the production of leather goods such as shoes, bags, and belts come under the category of small enterprises. These businesses require skilled labour and a higher investment in machinery.
Medium Enterprises are larger than small enterprises.
These enterprises require a higher investment in plant and machinery and employ more people.
As per the MSME Act 2006, a medium enterprise is one where the investment in plant and machinery does not exceed Rs. 50 crore and turnover does not exceed Rs. 250 crores.
1. IT and ITES Industry: Medium-sized software development companies, call centers, and business process outsourcing units come under the category of medium enterprises. These businesses require a higher investment in technology and skilled manpower.
2. Automotive Industry: Medium-sized automobile manufacturing companies, spare parts manufacturers, and service centers come under the category of medium enterprises. These businesses require a higher investment in plant and machinery, as well as skilled labour.
3. Pharmaceuticals Industry: Medium-sized pharmaceutical companies involved in the production of drugs and medicines come under the category of medium enterprises. These businesses require a higher investment in research and development, as well as skilled manpower.
MSMEs play a crucial role in the Indian economy by providing employment opportunities and contributing to GDP growth.
The government has been taking various initiatives to promote and support the growth of MSMEs. Businesses in various sectors such as food and beverage, textile and garment, chemical, engineering, leather, IT and ITES and more come under the umbrella of MSMEs. These businesses vary in terms of investment, size, and nature of operations.
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