MSMEs- A Game Changer

The Ministry of Micro, Small and Medium Enterprises (MSME), is a branch of the Indian Government. It is the apex executive body which is responsible for the formulation and administration of laws, rules and regulations for proper governance of MSMEs in India.

Definitions of Micro, Small & Medium Enterprises comes under the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 they are classified in two Classes:

1. Manufacturing Enterprises– The enterprises which are engaged in the manufacture or production of goods dedicated to any industry. Which is specified in the first schedule to the Industries (Development and Regulation) Act, 1951) or setting up a plant or machinery in the process of adding value to the final product- which will have a distinct name or character.

2. Service Enterprises- The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

MSMEs constitute a large market in India, the continuous development in the market which is home to multitude of enterprises. India has tremendous growth rate and market segmentation for small business and regulations.

The revised classification after the announcement made by Finance Minister having its effect from 1st July, 2020 are-1

Classification as per MSME notification dated 01.06.2020

i) a micro-enterprise, where the investment in Plant and Machinery or Equipment does not
exceed one crore rupees and turnover does not exceed five crore rupees;
(ii) a small enterprise, where the investment in Plant and Machinery or Equipment does not exceed
ten crore rupees and turnover does not exceed fifty crore rupees;
(iii) a medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

Process of Registration

1. Registration for an MSME can be done both online as well as offline.

2. Adhaar Number is mandatory for registration.

3. We have to fill an online form using Udyog Adhaar Registration.

4. E-Adhaar OTP can be used for e-verification.

5. Provisional registration is issued by the MSMEs before the commencement of business.

6. The validity of provisional registration is 5years or 60 Months.

7. The provisional registration is a helping hand for generating loans and applying for NOC from a regulatory authority.

8. Post the commencement of business entrepreneurs can apply for the permanent license.

9. The permanent license can be cancelled under certain circumstances.

Government support to MSMEs-

The Atma Nirbhar Bharat Abhiyaan announced by the Government has given way to various opportunities, which can help in clearing the road blocks that lies ahead of MSMEs-

  • Rs 3 lakh crore collateral free automatic loans for MSMEs
  • Rs 50,000 crore equity infusion through MSME Fund of Funds
  • Rs 20 crore subordinate debt for MSMEs
  • Extension of registration and completion date of real estate projects under RERA
  • Immediate pending refunds issuance to all non charitable trusts
  • Extension of the due date for ITR for FY’19-20 to November 30, 2020

Other Benefits for MSMEs

• Bank loans become cheaper than normal loans due to the registration of MSME.

• Enormous tax rebates are offered to MSME.

• It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years.

• There are many government tenders which are only open to the MSME Industries.

• They get easy access to credit.

• Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.

• Business registered under MSME is given a higher preference for government license and certification.

• There is a One Time Settlement Fee for non-paid amounts of MSME.

Conclusion-

The economy of India thrives on the shoulders of people who work for MSMEs. Such enterprises are a hope not only to the Indian economy but to millions of Indians which such enterprises employ each year. Amidst the pandemic the Government has announced the many such benefits and doled out loans and other advances, so as to lend support to the backbone of this country.

1 https://msme.gov.in/know-about-msme.

Leave a Reply

Your email address will not be published. Required fields are marked *