Next, to China, India has by far the largest MSME base in the world. Manufacturing of thousands of products varying from hi-tech items to traditional items along with a wide variety of services is carried out in this Micro, Small, and Medium Enterprises.
According to recent official estimates, there are around 64 million industries in the micro sector, 0.33 million in the small sector, and around 5,100 enterprises in the medium sector in the country with the largest number of estimated MSMEs in the state of Uttar Pradesh.
Factors that make an enterprise qualify as an MSME in India
In accordance with the MSME Development Act, 2006, there are two categories of MSMEs in India namely manufacturing and services.
In the case of the manufacturing segment, the description of an MSME is based on the capital investment made by the company in its plant and machinery.
On the other hand, the description of an MSME for the services sector is based on investments made by the company in its equipment.
However, revisions are being suggested in the Union Cabinet, where both the sectors will be defined based on the value of annual turnover instead of the investment made by the companies.
The registration process as an MSME in India
There is a simple form called ‘Udyog Aadhaar Memorandum’ for an enterprise to get registered as an MSME in India.
The entrepreneurs have to fill the form online wherein they need to mention details like:
• Personal Aadhar number
• Industry name and address of the business
• Bank account details, etc
All this information can be self-certified and the entrepreneurs do not need any supporting documents.
Soon after registering, they will get a unique Udyog Aadhaar Number (UAN) and they can avail business loans as well.
Opportunity areas for MSMEs in India
Domestic manufacturing of economical mobile phones, devices, telecom networking equipment like routers and switches;
Manufacturing of economical medical devices, and accessories like surgical gloves, syringes, and scrubs; In the service sector: Diagnostic labs.
Domestic manufacturing of economical consumer durables, consumer electronics, as well as designing of semiconductors and electric components;
Other opportunity areas for MSMEs include pharmaceutical, information technology, automotive, chemical, gems and jewelry, food and agriculture, and textile.
Available benefits to the MSMEs
The government of India has launched various measures and schemes to allow easier access to funds to MSMEs and to renovate and update the sector to make it more competitive in the global market.
These schemes include:
• Ensuring the product quality, especially the ones meant for exports
• Up-gradation and incubation of existing technology
• Providing credit-linked capital subsidy, and UID linked schemes
MSMEs are entitled to other concessions like:
• Availing business loans from banks without the need for any collateral
• Getting 50 percent subsidy on registration of patent
• Benefitting 1 % exemption on the interest rate on overdraft
• Receiving concession on power utility bills
• Being eligible for industrial promotion subsidy
• Getting protection against delayed payments and reimbursement of ISO certification charges.