Revision of MSME Definition
Kartavya Desk Staff
Source: News on Air
Context: The Government of India has notified revised criteria for MSME classification, increasing investment and turnover limits.
• Finance Minister had announced new classification criteria for MSMEs, with investment and turnover limits for the classifications proposed to be increased to 5 times and 2 times, respectively.
About Revision of MSME Definition:
• What it is:
• A policy update amending the thresholds for classifying Micro, Small, and Medium Enterprises based on investment and turnover.
• A policy update amending the thresholds for classifying Micro, Small, and Medium Enterprises based on investment and turnover.
• Announced In: Announced during the Union Budget speech by Finance Minister.
• Amended By: The Ministry of MSME under Section 7 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
• New Revision Effective From: Effective from April 1, 2025.
• Purpose of Revision:
• To align MSME classification with current business realities and growth trends. To facilitate scaling-up, better credit access, and market expansion. To promote resilience, employment, and self-reliance in the MSME sector.
• To align MSME classification with current business realities and growth trends.
• To facilitate scaling-up, better credit access, and market expansion.
• To promote resilience, employment, and self-reliance in the MSME sector.
• Features of New MSME Definition: Micro Enterprises: Investment limit raised from ₹1 crore to ₹2.5 crore. Turnover limit increased from ₹5 crore to ₹10 crore. Small Enterprises: Investment threshold increased from ₹10 crore to ₹25 crore. Turnover ceiling raised from ₹50 crore to ₹100 crore. Medium Enterprises: Investment limit revised from ₹50 crore to ₹125 crore. Turnover limit doubled from ₹250 crore to ₹500 crore.
• Micro Enterprises: Investment limit raised from ₹1 crore to ₹2.5 crore. Turnover limit increased from ₹5 crore to ₹10 crore.
• Investment limit raised from ₹1 crore to ₹2.5 crore.
• Turnover limit increased from ₹5 crore to ₹10 crore.
• Small Enterprises: Investment threshold increased from ₹10 crore to ₹25 crore. Turnover ceiling raised from ₹50 crore to ₹100 crore.
• Investment threshold increased from ₹10 crore to ₹25 crore.
• Turnover ceiling raised from ₹50 crore to ₹100 crore.
• Medium Enterprises: Investment limit revised from ₹50 crore to ₹125 crore. Turnover limit doubled from ₹250 crore to ₹500 crore.
• Investment limit revised from ₹50 crore to ₹125 crore.
• Turnover limit doubled from ₹250 crore to ₹500 crore.