Revised Criteria for MSMEs
Context:
Recently, the Central Government released the revised criteria for classifying MSMEs as announced during the Union Budget 2025-26.
- The new criteria will take effect from April 1, 2025.
Relevance:
GS-03 (Economy)
Revised criteria:
- Micro Enterprises:
- Investment: Up to ₹2.5 crore (earlier up to ₹1 crore).
- Annual turnover: Up to ₹10 crore (earlier up to ₹5 crore).
- Small Enterprises:
- Investment: Up to ₹25 crore (earlier up to ₹10 crore).
- Annual turnover: Up to ₹100 crore (earlier up to ₹50 crore).
- Medium Enterprises:
- Investment: Up to ₹125 crore (earlier up to ₹50 crore).
- Annual turnover: Up to ₹500 crore (earlier up to ₹250 crore).
Significance of MSMEs
- Employment: 5.93 crore MSMEs provide jobs to over 25 crore people.
- Economic Contribution: Accounted for 45.73% of India’s exports (2023-24).
- GDP Impact: GVA rose from 27.3% (2020-21) to 30.1% (2022-23).
- Regional Development: Boost rural industrialisation, reduce imbalances, and ensure fair wealth distribution.
Challenges
- Poor infrastructure, slow formalisation, tech resistance.
- Weak supply chain integration, credit constraints, and delayed payments.
Key Initiatives
- Udyam Registration Portal: simplifies enterprise registration.
- PM Vishwakarma: Supports artisans and craftspeople.
- PMEGP: Credit-linked subsidy for microenterprises.
- SFURTI: organises traditional artisans into clusters.
Prelims Question:
Which of the following statements about MSMEs in India is correct?
A) MSMEs contribute less than 10% to India’s total exports.
B) MSMEs play a crucial role in rural industrialisation and employment generation.
C) MSMEs do not require formal registration for operation.
D) MSMEs are entirely government-funded enterprises.
Answer: B) MSMEs play a crucial role in rural industrialisation and employment generation.
