Micro, small and medium enterprises (MSMEs) form a substantial chunk of the organized business sector in India, employing a large swathe of the population. In its Annual Report 2017-18, the MSME Ministry revealed that as of 2015-16, an estimated 63.3 million MSMEs were functioning across various sectors in India. Together, these enterprises contributed nearly 29% of India’s GDP, generating approximately 110 million (11 crore jobs) across rural and urban areas of the country.
Thus, there can be no doubt about the value of the MSME sector to the Indian economy. However, despite being such key contributors to economic development, MSMEs often suffer incredible difficulties in managing their working capital and finances.
Fortunately, recognizing these constraints and difficulties faced by the sector, the Indian government has launched various loan schemes and facilities to enable easy access to finance for MSMEs. From enabling credit guarantees to providing direct loans to entrepreneurs most in need of them, these government loan schemes exist to help small businesses who are otherwise strapped for funds.
Revised Definition of MSMEs
As part of the relief measures for MSMEs announced during COVID-19 Lockdown, the government has revised the definition of MSMEs. There was a low threshold in MSME definition earlier which left out a lot of businesses, which has now been addressed.
Existing MSME Classification
Criteria : Investment in Plant & Machinery or Equipment
Classification Micro Small Medium
Mfg. Enterprises Investment
