As per the Ministry of MSME report, the MSME sector contributes 45% of India’s total industrial employment, 95% of all industrial units and 50% of India’s total exports. Thus, the MSME sector is the backbone of the Indian economy.

You can get your business registered as an MSME if you fulfil the below criteria:

1. Micro Enterprise: investment less than Rs 25 Lakhs for Manufacturing and Less than Rs 10 Lakhs for service.
2. Small Enterprise: investment between Rs 25 Lakhs to Rs 5 Crore for Manufacturing and between Rs 10 Lakhs to Rs 2 Crore for service.
3. Medium Enterprise: investment between Rs 5 Crore to Rs 10 crore for Manufacturing and Rs 2 Crore to Rs 5 Crore for the service sector.

Why register as MSME?

If you are wondering about the benefits of MSME registration, then here is a list:

1. Avail collateral-free loans: The Government of India launched the Credit Guarantee Fund Scheme (CGS) for MSMEs, giving them the freedom to apply for MSME loan without pledging any collateral.
2. Lower interest rate: Sometimes, it is hard to get a secure loan for new businesses. In such cases, an MSME loan helps you get a loan at reduced rates.
3. Income Tax Exemption: MSME registration relieves you from undergoing audit procedures and makes your business eligible for income tax exemption.
4. Subsidies Offered: MSME registration makes you eligible for Industrial Promotion Subsidy, 50% subsidy for patent registration, and 1% exemption on the interest rate on overdraft.

Conclusion

Apart from the points mentioned above, MSME registration also offers several other benefits. MSME registration can be done by various business entities like Proprietorships, Partnership Firm, Private Limited Company, Public Limited Company, Limited Liability Partnership, Hindu Undivided Family, Self Help Groups, Society, Co-Operative Society, Trust, and Others.

Must Read: What are the Actual Crucial Differences Between a SMB vs SME?