How the MSME Sector is Being Promoted by Government

The Micro, Small, and Medium Enterprise are considered as the backbone of our economy. These enterprises seek assistance and protection from more prominent companies as they lack technological resources. As per the provision of Micro, Small and Medium Enterprise Development ( MSMED) Act, 2006, MSME Registration Process are classified into two classes:

Manufacturing Enterprises: These enterprises are involved in the manufacture or production of goods. These enterprises are also engaged in employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.

Service Enterprises: These enterprises are engaged in providing services and are defined in terms of investment in equipment.

Investment Limit for MSMEs

Manufacturing Enterprise

Enterprises	Limit on investment in plants and machinery
Micro-Enterprise	Not more than 25 Lakh rupees
Small Enterprise	More than 25 lakh rupees and less than 5 crores rupees
Medium Enterprise	More than 5 crores but less than 10 crore rupees

Service Enterprise

Enterprises	Limit on investment in equipments
Micro-Enterprise	Not more than 10 lakh rupees
Small enterprise	More than 10 lakh rupees but less than
Medium Enterprise	More than 2 crore but less than 5 crore rupees

Contribution of MSMEs in Indian Economy:

MSMEs are responsible for 45% share of our country’s total export.
These entities contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.
MSME sector has been consistently growing at the average rate of 10% annually.
This sector contributes about 8% of the country’s GDP.
As per the study done by Confederation of Indian Industries (CII) on Indian MSMEs shows that MSMEs contribution will be around 50% in India’s GDP by 2024.
Rural areas have many units of MSMEs; these units check the migration from rural to urban areas.
MSMEs are also helping people in gaining employment and employ around 120 million people in India.

MSME Schemes launched by Government

Zero defect Zero Effect

According to this model, the goods manufactured for export have to follow specific standards so that they are not sent back to India. This step taken by the government focuses on improving the quality of export from India.

Udyog Aadhar memorandum

This scheme launched by the government mandates the requirement of Aadhar number issued by the government of India. The benefit of registering in this scheme is ease in availing credit, loans and subsidies from the government. Registration can be done both ways, either online or offline.

Women Entrepreneurship

This scheme emphasises on more women starting their own business. The government provides capital, counselling and training to these women so they can manage and expand their business.

Incubation

This scheme aims at promoting new ideas, designs etc. Government finances around 75 to 80% of the project cost and help innovators in implementing their ideas.

Grievance Monitoring System

This scheme launched by the government caters to all sorts of complaints and suggestions by business and MSME owners. This scheme aims to make the system of grievance handling transparent and fast. This whole process is online.

Documents Required For MSME Registration Certificate

Address Proof of Business: For self-owned premises, you require Possession Letter, allotment letter, property tax receipt. If a municipal license exists in the name of the business or its proprietor, partner or director, then no other possession documents are required. If the business place is rented then you have to provide Rent receipt, NOC from the landlord, and a utility bill or similar document as evidence to the landlord’s ownership.
Copies of every sale and purchase bill related to the business
Copies of bills and licenses of the machinery purchased for business purpose
Partnership Deed/ Memorandum of Association (MOA) and Articles of Association ( AOA) along with the certificate of incorporation and copy of board resolution which has authorised a director to sign the MSME application.

How to register an MSME

Following are the details to be kept in mind while registering an MSME

The business owner should fill out the MSME registration Online or offline
An individual can register for more than one industry through individual registration
The applicant needs to provide his details like Name, Aadhaar, Name of the industry, PAN, mobile number, bank account details, etc.
No registration fee is applicable to the registration process.
After entering the required details accurately and uploading the required documents, the applicant shall receive the registration number for the business.

Concluding Remarks

The Micro, Small and Medium Enterprise contributes significantly to the Indian Economy in terms of GDP, employment generation and exports. Government has launched various MSME schemes to provide benefits to small scale enterprises so they can get a boost in this highly competitive sector.

Small business entities may apply for MSME Registration to avail subsidies and incentives offered by the government and to avail loans at concessional rates from banks.

Get Consultation from Experts on MSME Registration from Enterslice.