Government Revises MSME Classification Criteria

The government has announced revisions to the investment and turnover criteria for classifying micro, small, and medium enterprises (MSMEs). The new criteria will take effect from April 1. It increases the limits for micro, small, and medium enterprises, allowing for improved classification and growth opportunities.

The government has introduced major updates to the classification norms for micro, small, and medium enterprises (MSMEs), set to commence from April 1. Under the revised guidelines, entities with investments up to Rs 2.5 crore will be designated as micro enterprises, an increase from the previous Rs 1 crore limit, along with a turnover cap adjusted from Rs 5 crore to Rs 10 crore.

Further changes see small enterprises being recognized with investment figures soaring to Rs 25 crore, doubling from the earlier cap of Rs 10 crore. Correspondingly, turnover barriers have also been elevated, moving from Rs 50 crore to up to Rs 100 crore.

Enhancements for medium enterprises involve a shift in investment criteria from Rs 50 crore to a substantial Rs 125 crore, coupled with turnover thresholds revised to a significant Rs 500 crore. These changes align with announcements made by Union Finance Minister Nirmala Sitharaman, aimed at boosting MSME growth prospects through revised classification standards.

(With inputs from agencies.)