Date:April 5, 2023
What is small enterprises under MSMED Act?
MSME Law Notes by NB Associates
As per the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 of India, Small Enterprises are defined as the type of enterprises engaged in the manufacture, production, processing or preservation of goods, and whose investment in plant and machinery or equipment is more than Rs. 1 crore but does not exceed Rs. 10 crore, and the annual turnover does not exceed Rs. 50 crore.
The MSMED Act provides for the classification of Micro, Small and Medium Enterprises based on the investment in plant and machinery or equipment and the annual turnover of the enterprise. Small Enterprises are the second-highest category of enterprises after Micro Enterprises and are larger in scale.
Small Enterprises can be found in various sectors such as manufacturing, services, and trade. They play an important role in the economy by providing employment opportunities and contributing to economic growth and development.
The MSMED Act provides various benefits and incentives to Small Enterprises, such as priority sector lending from banks and financial institutions, preferential treatment in procurement, access to credit and capital, and other forms of support to promote their growth and development.
The Act also aims to facilitate the development of Small Enterprises by providing them with access to technology, skill development, and market opportunities.