MSMEs and their Critical Role in the Indian Economy

MSMED Act 2006 covers MSMEs (Micro, Small and Medium Enterprises) under both Manufacturing and Service sector. These have been defined separately for manufacturing and Service Sectors based on the investment in Plant & Machinery or Equipment, as per details below:-

INVESTMENT IN PLANT & MACHINERY
Manufacturing Enterprises - 

Micro Enterprises:  Upto Rs.25 Lakhs
Small Enterprises:   Above Rs.25 Lakhs & upto Rs.5 Crores
Medium Enterprises: Above Rs.5 Crores & upto Rs.10 Crores

Service Enterprises -

Micro Enterprises:  Upto Rs.10 Lakhs
Small Enterprises:  Above Rs.10 lakhs & upto Rs.2 Crores
Medium Enterprises: Above Rs.2 Crores & upto Rs.5 Crores


Micro, Small and Medium Enterprises (MSMEs) play a very important role in the development of the Indian Economy. 

Key features of MSMEs in the Indian growth story are as under:-

• MSMEs contribute to 45% of the nation’s manufacturing output,
• MSMEs contribute to 40-45% of the country’s exports,
• MSMEs are the Largest Job Creator after agriculture in the country. About 6.5 crore MSME units across the country employ almost 12 crore persons.
• Total contribution of MSMEs to the GDP is about 29%