Revamping MSME Classifications: A New Era of Growth

The government announced major revisions in MSME classification criteria, effective April 1, raising investment and turnover limits across micro, small, and medium enterprises. This change supports growth by aligning thresholds with economic growth. The finance minister highlighted this initiative in her budget speech, proposing significant increases to encourage MSME expansion.

The government has introduced significant changes to the turnover and investment criteria for classifying Micro, Small, and Medium Enterprises (MSMEs), effective from April 1. These revisions aim to foster growth within this vital sector of the economy.

Micro-enterprises will now include businesses with investments up to Rs 2.5 crore, a substantial rise from the former Rs 1 crore. Similarly, their turnover limit has increased from Rs 5 crore to Rs 10 crore. Small enterprises see their investment cap raised from Rs 10 crore to Rs 25 crore, with turnover limits climbing from Rs 50 crore to Rs 100 crore.

The update also impacts medium enterprises, with their investment threshold moving from Rs 50 crore to Rs 125 crore, and turnover limits going up to Rs 500 crore. These changes reflect the government's commitment to bolstering MSMEs, as highlighted in Union Finance Minister Nirmala Sitharaman's budget speech, emphasizing enhanced classification criteria to drive growth.

(With inputs from agencies.)