Revision of MSME Definition

Source:  News on Air

Context: The Government of India has notified revised criteria for MSME classification, increasing investment and turnover limits.

• Finance Minister had announced new classification criteria for MSMEs, with investment and turnover limits for the classifications proposed to be increased to 5 times and 2 times, respectively.

About Revision of MSME Definition:

• What it is:

• • A policy update amending the thresholds for classifying Micro, Small, and Medium Enterprises based on investment and turnover.

• Announced In: Announced during the Union Budget speech by Finance Minister.
• Amended By: The Ministry of MSME under Section 7 of the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
• New Revision Effective From: Effective from April 1, 2025.
• Purpose of Revision:

• • To align MSME classification with current business realities and growth trends.
  • To facilitate scaling-up, better credit access, and market expansion.
  • To promote resilience, employment, and self-reliance in the MSME sector.

• Features of New MSME Definition:
  1. Micro Enterprises:
     • Investment limit raised from ₹1 crore to ₹2.5 crore.
     • Turnover limit increased from ₹5 crore to ₹10 crore.
  2. Small Enterprises:
     • Investment threshold increased from ₹10 crore to ₹25 crore.
     • Turnover ceiling raised from ₹50 crore to ₹100 crore.
  3. Medium Enterprises:
     • Investment limit revised from ₹50 crore to ₹125 crore.
     • Turnover limit doubled from ₹250 crore to ₹500 crore.