How To Find If A Firm Is Micro Enterprise In India

According to the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006, the Micro, Small, and Medium enterprises are classified into two categories:

  1. Manufacturing enterprises
  2. Service enterprises

Manufacturing enterprises
As defined by MSMED, any enterprise that is into production or manufacture of goods pertaining to any Industry comes under Manufacturing Sector and is defined based on investment in Plant & Machinery.

  1. Micro Enterprises: The investment in plant & machinery does not exceed twenty-five lakh rupees. (Below Rs.25 lakh)
  2. Small Enterprises: The investment in plant &machinery is more than 25 lakh rupees but does not exceed 5 crore rupees. (Rs.25 lakh- Rs.5 crore)
  3. Medium Enterprises: The investment in plant & machinery is more than five crore rupees but does not exceed ten crore rupees. (Rs.5 crore- Rs.10 crore)

Calculation of investment in plant and machinery does not include the cost of pollution control, research and development, industrial safety devices and such other items.

Service enterprises
Any enterprise that provides or renders service is said to be Service enterprise and is defined based on investment in equipment. So how much is invested in equipment is the basis for the classification of Micro, Small and Medium enterprises.

  1. Micro Enterprises: The investment in equipments does not exceed ten lakh rupees. (Below Rs.10 lakh)
  2. Small Enterprises: The investment in equipment is more than ten lakh rupees but does not exceed two crore rupees. (Rs.10 lakh- Rs.2 crore)
  3. Medium Enterprises: The investment in equipment is more than two crore rupees but does not exceed five core rupees. (Rs.2 crore- Rs.5 crore)

Suggested Reading:
Micro – Franchising in India
Formation Of SME Clusters
Growth of MSEs in India
Development measures for MSEs in India
Significance Of Micro Businesses In India
Government Owned Business in India

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