MoMSME revised the MSME classification effective from April 2025, these changes will be effective from April 1, 2025.
National
In March 2025, the Ministry of Micro, Small, and Medium Enterprises (MoMSME) updated the classification criteria for businesses under the MSME category. These changes will take effect from April 1, 2025. The revision modifies the criteria set in 2020.
- The notification, issued under the MSME Development Act, 2006, derives its authority from sub-section 1 of Section 7 read with sub-section 9 of Section 7, which defines MSME classification based on investment and turnover, and Section 8(2) read with Section 8(3), which permits amendments after consulting the Advisory Committee.
- The updated classification was announced by Union Minister Nirmala Sitharaman, Ministry of Finance (MoF), during her Budget speech for 2025-26.
- The investment and turnover limits for MSMEs have been increased, with Micro Enterprises now capped at ₹2.5 crore investment and ₹10 crore turnover, Small Enterprises at ₹25 crore investment and ₹100 crore turnover, and Medium Enterprises at ₹125 crore investment and ₹500 crore turnover.
Main Point :- (i) The updated classification provides several benefits, including easier access to loans with lower interest rates, priority in government contracts, tax benefits, and duty exemptions. It also supports technology upgrades and innovation through various schemes.
(ii) The revision aims to drive economic growth, accommodate inflation, and help businesses expand by providing a more flexible and supportive framework.
(iii) India has over 1 crore registered MSMEs, employing 7.5 crore people. MSMEs contribute 36% to the country's manufacturing output, with their share in total exports at 45.56%.
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