MSME INDIA

Contents
• MSME Defined
• Introduction to MSME
• Eligibility Criteria
• Characteristics
• Industries and Schemes
• Importance
• Benefits
• Advantages & Disadvantages
• MSE and Self Reliant Scheme
• Eligibility and Registration
• EDP
• UAM
• Institutions
Micro, Small and Medium Enterprises (MSME)

• Notified on October 2, 2006, Micro, Small and Medium Enterprises

Development (MSMED) Act, 2006 deals with the definition of MSMEs.

• MSMEs are small sized businesses defined based on:

 The investment in plant and machinery for those engaged in

manufacturing or production, processing or preservation
of goods and

 The investment in equipment for enterprises engaged in

providing or rendering of services.
Worldwide Trends in the SME Sector

• Japan – SMEs employ 70% of the wage

earners and contribute 55% of the value-
added.

• Thailand – SMEs employ 60.7% of the

population while contributing 38% to the
GDP.

• China – SMEs contribute to over 68% of the

exports – in the last 20 years created more
SMEs than the total number of SMEs in
Europe and the US combined.
Tracing the trajectory of the evolving MSME sector
• The MSME sector contributes to
 45% of India’s Total Industrial
Employment contributing to 28% of GDP,
 50% of India’s Total Exports and
 95% of all industrial units of the country
and
 more than 6000 types of products are
manufactured in these industries.

• Is India’s second largest Employer after

Agriculture providing employment to
111 million people
This trajectory of growth explains how the sector is also shouldering the country’s
magnanimous vision to become a five trillion-dollar economy by 2024-25.
Existing and Revised Definition of MSMEs
Existing MSME Classification
Criteria : Investment in Plant & Machinery or Equipment
Classification Micro Small Medium

MFG. Enterprises Investment < Rs. 25 lakhs Investment < Rs. 5 Crores Investment < Rs. 10 Crores

Service Enterprises Investment < Rs. 10 Lakhs Investment < Rs. 2 Crores Investment < Rs. 5 Crores

Revised MSME Classification

Composite Criteria : Investment and Annual Turnover
Classification Micro Small Medium

Investment < Rs. 1 Crore Investment < Rs. 10 Crores

Investment < Rs. 50 Crores
and and
Manufacturing & Services and
Turnover < Rs. 5 Crores Turnover < Rs. 50 Crores Turnover < Rs. 250 Crores
Characteristics of MSME
• Labour Intensive

• Less Capital Required

• Short gestation period

• Helps in Decentralisation

• Greater Flexibility

• Large Market Share

• Employment Generation
Industries Under MSME
A few manufacturing sectors that may come under MSME:

• Textile, apparel and leather industries.

• Computer manufacturing.
• Furniture - wood products.
• Poultry farming.
• Food products.
• Chemical products.
• Electrical machinery and parts.
• Non-metallic mineral products.
Industries Under MSME
A few service sectors that may come under MSME:

• Photocopying service
• Electronics repair service
• Business incorporation service
• Taxation services
• Beauty Parlours
• Barbershops
• Tailors
• Call Centres
• Labs
• Private investigators
• IT services
Industries Under MSME
• 63.05 million micro industries,
• 0.33 million small, and
• 5,000 medium enterprises in the country.

The state of Uttar Pradesh has the largest number of

estimated MSMEs with a share of 14.20 percent of the total MSMEs in
the country.
MSME Schemes
• Udyog Aadhaar memorandum
• Zero Defect Zero Effect
• Quality Management Standards & Quality technology Tools
• Grievance Monitoring System
• Incubation
• Credit Linked Capital Subsidy Scheme
• Women Entrepreneurship
Importance and role of MSMEs in the Indian Economy
• To generate large scale employment at low capital cost

• To sustain economic growth and increase exports

• Flexibility ensures innovation

• Making Growth Inclusive

• Adaptability – capacity to adjust with changing environment

• Ensures regional development

 Advantages Disadvantages
• Close Supervision • Absence of adequate and timely banking finance.
• Nature of Demand • Limited capital and knowledge.
• More Employment • Non-availability of suitable technology
• Need of Small • Low production capacity
Capital • Ineffective marketing strategy
• Direct relation • Constraints on modernisation & expansions
between the • Non availability of skilled labour at affordable
Workers and the cost
Employers • Follow up with various government agencies to
• Direct Relation resolve problems due to lack of man power and
between the knowledge etc.
Customers and the
Producers
Benefits provided to MSMEs
• Collateral free loans from banks under the priority sector lending
scheme.
• 1% exemption on interest rate on overdraft
• 50% subsidy on Trademark registration
• Eligible for industrial promotion subsidy
• Concession on electricity bill
• Reimbursement of ISO certificate
• Protection against delayed payment.
• 25% share in procurement by government and government-owned
companies.
• Promoters are allowed to bid for stressed assets under the
insolvency law (unlike big companies).
• Various government schemes and funds.
Prime Minister’s Vision
Call for आत्मनिर्भर भारत अभियान (Atmanirbhar Bharat Abhiyaan)
or
Self-Reliant India Movement

• Five pillars of Atmanirbhat Bharat

• Economy
• Infrastructure
• System
• Vibrant Demography
• Demand
• $5 Trillion Indian Economy
• Bold reforms across sectors will drive the country’s push towards self-
reliance
• Become Vocal for our Local Products and make them Global
Key announcements of  आत्मनिर्भर भारत अभियान

• Rs 3 lakh crores collateral-free Automatic Loans for MSMEs

• Rs 50,000 crores equity infusion through MSME Fund of Funds
• Rs 20,000 crores subordinate debt for MSMEs
• Rs. 2500 Crores EPF support for Business and workers for 3 months
(i.e. up to Aug 2020)
• Rs, 6750 Crores EPF contribution reduced for business and workers
for 3 months (i.e. up to Aug 2020)
• Rs. 30,000 Crores liquidity facility for NBFC/HCs/MFIs
• Rs. 45,000 Crores Partial Credit Guarantee Scheme 2.0 for NBFC
• Rs. 90,000 Crores Liquidity Injection for DISCOMs
Key announcements of आत्मनिर्भर भारत अभियान

• New definition for MSMEs

• Other interventions for MSMEs
• Relief to contractors
• Global tender to be disallowed up to Rs. 200 Crores
• Extension of registration and completion date of real estate projects
under RERA
• Rs. 50,000 Crores liquidity through TDS/TCS reductions
• Extension of the due date for ITR for FY’19-20 to November 30, 2020
Eligibility to Apply for MSME Registration

• Proprietorships,
• Hindu Undivided Family,
• Partnership Firm,
• One Person Company,
• Limited Liability Partnership,
• Private Limited Company,
• Limited Company,
• Producer Company,
• any association of persons,
• co-operative societies or
• any other undertaking can obtain MSME registration in India.
How To Get MSME Registration
1. Registration can be done 2. Aadhar Number is mandatory 3. File an Online Form
both Online and Offline for Registration using Udyog Aadhar
Registration

5. Prior to Commencement of
4. Provisional Registration is 6. For the verification
business, provisional
valid for 5 years or 60 process, one can use E-
registration is issued by
Months Aadhar OTP.
MMSMEs

7. Provisional Registration 8. Post the commencement of 9. Permanent Licence is

assists in obtaining bank business, entrepreneurs can comes with Lifetime
loans and in applying for apply for Permanent Licence Validity. It can also be
NOC from regulatory cancelled under special
authorities circumstances.
MSME EDP Programme
ENTREPRENEURSHIP DEVELOPMENT PROGRAMMES (EDP)

• Before starting any business getting training and certificate by MSME will be
very essential for your business
• You will get information about how to -
• Start your business
• How to get loan by Bank
• MSME will help you in all processes
• Total Duration – 06 Weeks (30 working Days)
• The intake capacity will be 25 participants
• No participation fee will be charged from SC, ST, physically handicapped,
BPL and Women candidates.
EDP Course Coverage
• Selection of Industries

• Process of Registration

• Finance and Marketing

• Market Survey

• Preparation of Project Report

• Industrial Visit Etc. ( 01 Week)

Online Filing of Udyog Aadhar Memorandum (UAM)
A one-page simple registration form for online filing of UAM has been
introduced

The filing of UAM can be done on http://udyogaadhaar.gov.in

The salient features of Udyog Aadhaar are:

Registration is online and user-friendly.

• UAM can be filed on self-declaration basis.
• No documentation required.
• No Fee for filing.
• File more than one Udyog Aadhaar with same Aadhaar Number.
Institutions
Central Government:
• Small Scale Industries Board (SSIB)
• National Bank for Agriculture and Rural Development (NABARD)
• Small Industries Development Organisation (SIDO)
• National Small Industries Corporation (NSIC)
• Khadi and Village Industries Commission (KVIC)
• Small Industries Development Bank of I(SIDBI)
State Government:
• State Financial Corporation (SFC)
• Small Scale Industries Development Corporation (SSIDC)
• Technical Consultancy Organisations (TCO)
Non Government:
• Indian Council of Small Industries (ICSI)
• Laghu Udyog Bharati (LUB)