Msme Benefits and Aatmnirbhar Bharat

“Micro, Small and Medium Enterprise (MSME) sector in India can play a crucial role by standing, robust on all the five pillars, thus achieving the vision of self-reliant India.”

What is MSME?

The Micro Small and Medium Enterprises [MSME] are small-sized entities, defined in the terms of their size of the investment. MSME industries are the backbone of the economy in India. The Micro, Small, and Medium Enterprises sector is the most vibrant and dynamic industrial sector contributing significantly to the GDP and export while employing around 40 per cent of the Indian workforce. It contributes immensely to the country’s socio-economic development.

The Government of India introduced the MSME [Micro, Small, and Medium Enterprises] in agreement with Micro, Small and Medium Enterprises Development [MSMED] Act of 2006. The Micro, Small and Medium Enterprises Act, 2006 defines MSMEs engaged in manufacturing based on their investment in plant and machinery. According to the preliminary definition, manufacturers with Rs 25 lakh investment in plant and machinery were termed micro-enterprises and those with investments between Rs 25 lakh and Rs 5 crore were defined as small enterprises. Further, firms with investments of up to Rs 10 crore were regarded as a medium.

Now the revised definition as per ‘Atmanirbhar Bharat’ announced on 13 May 2020.

  • Investment limit revised upwards
  • Additional criteria for turnover also being introduced.
  • The distinction between manufacturing and service sector to be removed.
  • Necessary amendments to the law will be there

How to become a MSME?

Any existing functioning or new business set up fulfilling the eligibility criteria can apply for MSME registration from the national portal for registration of MSME. Before starting the process, Aadhar Card is compulsory in the registration of MSME.


It is the vision of the Prime Minister of India to make India a self-reliant Nation. It can be explained in the following points which are the objectives of the scheme.

  • To drift from Globalization to Localization, to achieve self-reliant, sectors such as food, leather, furniture, clothing industry, electronics etc. shall rehabilitate their processes of pronouncement to a local level which were earlier dependent widely on Chinese products. It is essential for Indian citizens to be dependent on the local market and supply chains.
  • To support the State Government, the scheme shall give assistance to the State Government by increasing their borrowing limit from 3 to 5 per cent for the financial year 2020- 202. The borrowing shall be limited to areas like One Nation One Ration, Electricity Distribution.
  • The idea of this scheme is to prosper the economy which takes quantum jumps, not an incremental change. It will revive every sector of the economy.

According to the prime minister, the five pillars of self-reliance are:

· Economy that will bring not just incremental change but a quantum jump.

· Infrastructure that will be a modern India’s symbol.

· System that will be technology-driven.

· Demography will serve as a source of energy for self-reliant India.

· Demand and supply will boost the economy of India.

Six Major benefits for MSMEs

· A collateral-free automatic loan for MSMEs worth Rs. 3 Lakh Crores has been announced for a time period of 4 years. 45 Lakh MSMEs are to be benefited from this scheme.

· Emergency Credit line 20, 000 Crore subordinate debts will be facilitated by the government for the problem and stress of equity and around 2 Lakh MSMEs with below-average performance can benefit from the scheme.

· Tenders for Government procurement up to 200 crores will no longer be allowed globally.

· MSMEs will also be allowed to utilize E-commerce platforms via market links. They will be given their dues within 45 days whether from government agencies. An EPF support of Rs. 2500 Crore for business and workers for three more months was also announced.

· Definition of MSME is revised to their benefit like investment limit have been raised upwards, turnover of MSMEs have been taken into consideration and distinction between manufacturing and service sectors are removed.

· A Funds of funds will be set up to be operated through the Mother Fund, this will help to extend the MSMEs size and capacity.

Increase in credit guarantees, subordinated debts, clearing of outstanding dues and a wider definition would go a long way to revive the growth of MSMEs and boost the efforts to make the country self-reliant under the Atmanirbhar Bharat Abhiyan.

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