New Delhi
If you are going to start a small business, then definitely know the new rules related to MSME (Micro, Small and Medium Enterprises). The government has changed the definition of MSME. Now on the basis of investment and turnover, it will be decided which business will come in the micro category and which small and medium category. These new rules will be applicable from 1 April 2025.
The government announced the new MSME rule in the budget presented on 1 February. After the implementation of these new rules, now MSME will be identified in a new way. This will help small industries to move forward. The government has increased the investment and business limit for MSME. More investment and business industries will also be able to join MSME than before.
What happened?
Now their investment and business limit has been increased to identify MSME. The investment limit has been 2.5 times and the business limit is 2 times. More than this, MSMEs will be able to take advantage of the government’s schemes.
If a company has invested up to Rs 2.5 crore, it will be considered as micro enterprises. Earlier this limit was Rs 1 crore.
Similarly, companies with investment up to Rs 25 crore will be called small enterprises. Earlier this limit was Rs 10 crore.
If an MSME has invested up to Rs 125 crore, it will be considered as medium enterprises. Earlier this limit was Rs 50 crore.
New rules in case of turnover
If the turnover of a micro enterprises is up to Rs 10 crore, it will be considered as micro enterprises. Earlier this limit was Rs 5 crore.
The turnover limit for small enterprises has been increased from Rs 50 crore to Rs 100 crore.
The limit has also been increased for medium enterprises. It has been increased to Rs 500 crore. Earlier this limit was 250 crores.
Why took this decision?
During the budget on February 1, Finance Minister Nirmala Sitharaman had said, ‘Nowadays more than 1 crore MSMEs are registered. They provide jobs to 7.5 crore people and are 36% of our country’s manufacturing. These MSMEs make good quality products and they belong to 45% of our exports. To make them further better, to advance in technology and easily get money, so we have increased their investment and turnover limit. This will encourage them to move forward and give jobs to the youth.
What will be the benefit?
These changes will benefit MSME i.e. small industries. They will now be able to grow their business without any fear. This step of the government will help strengthen the MSME sector and pursue the country’s economy. Small businessmen will now get more opportunities and they will be able to contribute even more in the development of the country.