About the Ministry of Micro, Small and Medium Enterprises (MSME)

What is MSME?

Micro, Small and Medium Enterprises (MSME) sector has a great potential to boost the Indian Economy. This sector has emerged as a highly pulsating  sector of the Indian economy over the past five decades. In comparison to the large industries, MSMEs play crucial role in providing large employment opportunities at comparatively lower capital cost. It also helps in industrialisation of rural & backward areas, thereby, reducing regional imbalances and income disparities. MSMEs are the ancillaries to large industries and has enormous contribution to the socio-economic development of the country.

How is the Ministry benefiting the nation?

The Ministry of Micro, Small & Medium Enterprises aims to promote growth and development the MSME Sector, including Khadi, Village and Coir Industries, with the cooperation of the concerned Ministries and State Governments. Khadi is a hand handwoven cloth which had a great significance in the national freedom movement. Coir is a natural fibre extracted from the husk of coconut and used in products like doormat and brushes.

Khadi and Village Industries (KVI) are two national heritages of India. One of the most significant aspect of KVI in Indian economy is that it is creates employment at a very low per capita investment.

Coir Industry is an agro-based industry which originated in the state of Kerala and has now been spread to the other coconut producing states like Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, West Bengal, Maharashtra, Assam, Tripura, etc. It is an export oriented industry and has a great potential to enhance exports. Coir products has high acceptability due to its ‘environment friendly’ image.

The Ministry is providing support to existing enterprises and encouraging creation of new enterprises. The Micro; Small and Medium Enterprises Development (MSMED) Act was issued in 2006 to provide a legal framework to the small scale businesses. The Act seeks to facilitate the development of these enterprises and also enhance their competitiveness. The Micro, Small and Medium enterprises are defined in this act.

The act specifies the ceiling for investment in the business to be recognised as an MSME. The limits specified in the act are :-

a) In the case of the enterprises engaged in the manufacture or production of goods :-

• a micro enterprise, where the investment in plant and machinery does not exceed twenty-five lakh rupees;
• a small enterprise, where the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore rupees; or
• a medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees;

(b) In the case of the enterprises engaged in providing or rendering of services, as :-

•  a micro enterprise, where the investment in equipment does not exceed ten lakh rupees;
•  a small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or
• a medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees.

The Ministry of MSME is providing loans upto 25 lacs at a subsidised rate (upto 35% of subsidy) along with a minimal beneficiary’s own contribution (10% for the general category and 5% for the reserved category people). These loans are being given under the Prime Minister’s Employment Generation Programme (PMEGP).

Further, the ministry with the help of various institutes including The National Institute for Entrepreneurship and Small Business Development (NIESBUD) is providing Entrepreneurship and Skill development programmes.

The list of standardised courses at NIESBUD are given in this list. Apart from these courses, the institute organises various short term courses as well.

To know more about the MSME Schemes, visit here.