Over the last 5 decades, MSME, Micro Small Medium Enterprise or Small Scale Industries (SSI), emerged as the most dynamic and vibrant sector of the Indian economy. As per the msme.gov.in report, MSME contributes around 8% of India's GDP and covers around 90% of total India's industrial unit producing more than 6,000 products. In addition to this, these industries provide the total industrial employment of around 45% and contribute 40% to India's total export. MSMEs contribute enormously to the socio-economic development as it aims to reduce regional imbalances and also assures more equitable distribution of national income and wealth.
As per the provision of the MSME Development Act 2006, MSME can be classified into two classes:
1) Manufacturing enterprise; and
2) Service enterprise.
As per the vide notification no. 1642(E) dated 29.09.2006 the limit for investment in plant and machinery/equipment for manufacturing and service enterprises are mentioned below:
Up to Rs. 25,00,000
More than Rs 25,00,000 but less than Rs 5,00,00,000
|More than Rs 5,00,00,000 but less than Rs 100,000,000|
|Service Enterprises||Less than Rs 10,00,000||More than Rs 10,00,000 but less than Rs 2,00,00,000||More than Rs 2,00,00,000 but less than Rs 50,000,000|
The MSME Development Act, 2006 was introduced with a motive of promoting and development of MSMEs as well as enhancing competitiveness among them. MSME Act also emphasized on the matters connected with MSME such as:-
AADHAR number is now mandatory for registering under the MSME Act. The person has to furnish an online application using the UDYOG AADHAR Registration, and this can be verified using e-AADHAR OTP.
Further, in the initial 5 years, if an entity has not started its business a provisional registration is given to them. During such tenure, it can apply for the bank loans and No Objection Certificates (NOC) from regulatory bodies. The entity can apply for a permanent license once it starts operating, the validity of such a license is throughout life unless it is revoked or cancelled.
To register a business under the MSME Act following documents are required:
In order to obtain the registration, business has to submit a copy of the sale bill of all the product supplied and purchase bill of all the purchases a business has made to produce that product.
If the business who wants to register is a partnership firm then in such case it has to submit its partnership deed and registration certificate in case it is a registered partnership firm.
In case of a registered company, a copy of MOA and AOA along with incorporation certificate has to be submitted.
Note: A business has to submit a copy of the resolution passed in general meeting to sign the MSME application.
In a few cases, the industrial license has to be submitted by the applicant which can be obtained by giving an application to the Government of India.
Further, on demand of the MSME Development authority, the applicant may have to submit all the purchase and installation receipts related to plant and machinery/equipment.
Here is the list of schemes launched by the government for MSMEs:
Any owner of MSME having AADHAAR card can register under this scheme. This scheme provides various benefits to the MSME owners, some of them are listed below:
If an existing MSME registers under this scheme, then they are eligible for rebates and concessions. Some of the concession and rebates under this scheme as per https://www.zed.org.in/ are:
The main motive behind this scheme is to encourage the MSMEs to use the latest QMS and QTT ensuring effective and efficient working of the MSMEs. The main component of this scheme is listed below
Any MSME can be registered under this scheme to address their problem or grievance. In case the owner wants to verify the grievance status, they need to follow the below procedure
However, in a case, if the owner is not satisfied with the outcome, he/she can reopen the registered grievance.
To help the innovators to implement their new design, ideas or products, this scheme was introduced. The innovator can get finance up to 80% for their projects from the government. The idea behind the introduction is to promote:
If an MSME registers under this scheme, they will be provided with a capital subsidy to adopt new technology and replace their old and obsolete technology. To get these subsidies the MSME can directly approach to the banks under this scheme.
This scheme was introduced to encourage women to start their own business to achieve freedom in terms of financial status. Under this scheme, the government will provide capital, training, counseling and delivery methods and techniques to these women so that they could effectively manage their business and expand it in the future.
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