MSME is a certification provided by the government of India to medium, small and micro-level entrepreneurs. Those business entities who are engaged in the manufacturing, processing, and providing services on a microscopic scale are eligible to get the benefit of government schemes by taking MSME certificates/Udyam Registration. The Central Government, as well as State Government, offers many benefits like subsidies in taxes and excise exemptions scheme, lower interest rates, various power subsidies, and much additional support. The primary motive behind this certification is to provide financial assistance to small scale industries so that they can develop themselves and be capable of taking part in the competition. This certificate is bone for small sectors as they can get financial support from banks or financial institutions at a very minimal interest rate.
The government makes the classification based on investment in plant & machinery for the entrepreneurs who can avail the benefit of MSME and these are:
MICRO ENTERPRISES: Those enterprises whose investment in plant & machinery is less than 1 crore rupees and turnover is less than 5 crore rupees.
SMALL ENTERPRISES: The enterprise that invests in their plant & machinery more than 1 crore rupees but less than 10 crore rupees and the turnover limit is more than 1 crore rupees but less than 25 crore rupees
MEDIUM ENTERPRISES: Where the investment in plant & machinery is more than 10 crore rupees but less than 50 crore rupees, and the turnover limit is more than 25 crore rupees but less than 250 crores. Any business entity whose investment is less than the above-specified limit can apply for MSME certification or Udyam registration certificate after company registration whether the company is a private limited company or public limited company or any other applicant like society or the proprietorship firm or Limited Liability Partnership, etc… A proprietorship firm can also be started by taking an MSME certificate/ Udyam registration certificate. MSME certification is the best option for starting the business on a small scale as it is also not costly to get this certificate.