New definition of MSME and its contribution to the economy

New definition of MSME: The amount of investment and annual turnover for new businesses in manufacturing and service sectors are similar, thereby eliminating the gap between these two sectors.

MSME – Merged Criteria: Investment and Annual Turnover
Sector Typemicro industrysmall industrymedium industry
Both manufacturing and service sectors Those industries in which Rs. 1 crore. Whose investment is less than Rs 5 crore and whose annual turnover is Rs 5 crore. is less than.Those industries in which Rs. 10 crores. Whose investment has been made less than Rs. 50 crores and whose turnover is Rs. 50 crores. Till then.Those industries in which Rs. 50 crores. Those whose turnover is up to Rs 250 crore have invested less than Rs.

MSME Loan Schemes Launched by Government of India

MSME schemes offered by financial institutions and launched by the Government of India are explained below:

  • CGTMSE : Credit Guarantee Fund Trust for Micro and Small Enterprises
  • CLCSS : Credit Linked Capital Subsidy Scheme
  • Credit Guarantee Scheme
  • Mudra Scheme under PMMY
  • National Small Industries Corporation (NSIC) Subsidy
  • PMEGP : Prime Minister's Employment Generation Program
  • PMRY : Prime Minister Employment Scheme
  • PSB loan in 59 minutes
  • standup india
  • Startup India

Comparison of interest rates of main banks offering business loans in the year 2024

Bank/ Loan InstitutionRate of interest
HDFC BankStarting from 16%apply
flexi loanStarting from 16%apply
Axis BankStarting from 17%apply
Bajaj FinservStarting from 17%apply
Tata Capital FinanceStarting from 17%apply
ICICI BankStarting from 18%apply
Lendingkart FinanceStarting from 18%apply
IDFC First BankStarting from 20%
Indifi FinanceStarting from 18%apply

Features of Ministry of MSME (MoMSME)

  • Works for the welfare of artisans and workers
  • Provides credit limit or financial assistance from banks
  • Promotes entrepreneurship development i.e. new business and works on skill upgradation through specialized training centers.
  • Supports technology upgradation, infrastructure development and modernization
  • Provides support for easy access to domestic and export markets
  • Provides modern testing facility and quality certification
  • Supports packaging, product development and design interventions.

Major entities working under MoMSME:

  • Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
  • Khadi and Village Industries Commission (KVIC)
  • Mahatma Gandhi Institute for Rural Industrialization (MGIRI)
  • National Institute of Micro, Small and Medium Enterprises (NIMSME)
  • National Small Industries Corporation (NSIC)
  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Opportunities in MSME

MSME industry has immense potential due to the following factors:

  • Export promotion for Indian products
  • Funding – Finance and Subsidy
  • Promotion and support for new businesses from the government
  • Increase in demand in domestic market
  • less capital required
  • manpower training
  • Project Profile
  • Procurement of raw materials and machinery
  • Tooling and testing support and more

MSME Registration Factsheet (2021-22)

Total MSME Registration – 9,11,5082

Source: Official website of Enterprise Registration. Updated numeric as of June 2022.

Estimated number of MSMEs in India – 2021-2022

Activity Category/SectorEstimated number of enterprises (in lakhs)share


List of projects identified by MSME Ministry to promote MSMEs in aspirational districts with multiple projects:

  • Prime Minister's Employment Generation Program (PMEGP) – 178
  • Micro and Small Enterprises Cluster Development (MSE-CDP) – 81
  • EDP/MDP Schemes – 46
  • Entrepreneurship and Managerial Development of SMEs through Incubators – 13
  • MSME Market Development Assistance (MDA) – 12
  • Marketing Assistance and Technology Upgradation (MATU) – 10
  • Revamped Scheme of Fund for Development of Traditional Industries (SFURTI) – 10
  • Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) – 7
  • Credit Linked Capital Subsidy for Technology Upgradation – 6
  • Financial assistance to MSMEs in ZED Certification Scheme – 4
  • Technology and Quality Upgradation Support for MSMEs – 4
  • Lean Manufacturing Competitiveness for MSMEs – 3
  • Design Clinic for Design Expertise to MSMEs – 1
  • Assistance to Training Institutes (ATI) – 1
  • Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)-1
  • Skill Upgradation and Women Coir Scheme (MCY) – 2
  • Market Promotion and Development Scheme (MPDA)- 1
  • Performance and Credit Rating Scheme- 1
  • Marketing Support/Assistance to MSME (Bar Code)
  • Others – 52

Role of MSME in Indian economy

In 1961, by merging the Ministry of Small Scale Industries and the Ministry of Agriculture and Rural Industries; The Ministry of Micro, Small and Medium Enterprises (M/o MSME) was formed.

MSMEs produce and manufacture a wide variety of products for domestic and international markets. MSMEs also help in the development of Khadi, Village and Coir industries with the help of concerned ministries, state governments and stakeholders.

The data given in the table below is according to the Central Statistics Office (CSO) and the Ministry of Statistics and Program Implementation (MOSPI).

Contribution of MSME in the country's economy

Year MSME GVA Growth (%)total gvaShare of MSME in GVA (%) total gdpShare of MSME in GDP (in%)

Source: Central Statistics Office (CSO), Ministry of Statistics and Implementation

Under the Micro, Small and Medium Enterprises Development Act, 2006, the Government of India established the National Board for Micro, Small and Medium Enterprises (NBMSME) to examine the factors affecting the growth of MSMEs. This board reviews the existing policies for the development of MSME sector i.e. finds out what is lacking in the plan and where improvements are needed and gives suggestions to the government.

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