MSMEs or Micro, Small and Medium Enterprises are the largest job providers in the country after agriculture, employing 11.1 Crore people. In recent years, the government has introduced numerous schemes to support the MSME sector.
Technological, financial and knowledge-based assistance is provided to help these small businesses flourish.
As a business owner, however, you must understand what is MSME thoroughly so that you qualify for the available government schemes easily.
If your enterprise matches these parameters, it gets considered as an MSME and can enjoy several government-initiated schemes.
For manufacturing enterprises, investments in machinery and equipment are capped as follows –
- Micro –not more than Rs. 25 Lakh.
- Small – Between Rs. 25 Lakh to Rs. 5 Crore.
- Medium – Between Rs. 5 Crore to Rs. 10 Crore.
For service enterprises, total market capitalisation or revenue generated as per output are limited as follows –
- Micro – Not more than Rs. 10 Lakh.
- Small – Between Rs. 10 Lakh and Rs. 2 Crore.
- Medium – Between Rs. 2 Crore to Rs. 5 Crore.
Once matched, learn to prepare your small business for its growth phase along with these schemes.
Different schemes for the MSMEs in India
- Udyog Aadhaar Memorandum
The Udyog Aadhaar Memorandum scheme is a replacement of the MSME registration or SSI registration. The previous registration procedure was complex with a lot of paperwork, including 11 forms.
This new scheme requires only 2 forms –
a. Entrepreneur Memorandum-I.
b. Entrepreneur Memorandum-II.
Individuals need to provide their 12-digit Aadhaar number in this scheme. Once MSME registered, they qualify for government subsidies, MSME loans, easy bank account creation, etc. NBFCs like Bajaj Finserv offer high-value business loans for MSMEs with attractive features.
As per statistics, around 2 Lakh small businesses have registered under the MSME category so far through this scheme.
2. CLCSS or Credit Linked Capital Subsidy Scheme
The CLCSS aims to provide MSME owners with state-of-the-art technology in their equipment and machines. Under the scheme, MSMEs can directly approach financial institutions and enjoy a capital subsidy of up to 15%.
Its main objective is to help owners replace their obsolete technology with the advanced ones.
Even newly established MSMEs are eligible to apply for this capital subsidy scheme. They can also approach NBFCs to avail affordable MSME loan for efficient financing.
3. Women entrepreneurship
The government launched this scheme to encourage women entrepreneurs to start their own business. This MSME scheme is especially for women with the insufficient educational background to manage entrepreneurship.
Aspirants can benefit from training & counselling on capital and delivery techniques to expand their venture proficiently. They can learn how to create a growth plan for their small business.
Presently, 20.4% of the MSMEs are run by women entrepreneurs in India.
The government launched this incubation scheme to support innovative ideas, promote knowledge innovations and technological advances. The host Institutions, engaged in the exploration and implementation of such new ideas, can benefit from 75% to 85% of the project cost. The upper limit of this financial assistance is capped at Rs. 8 Lakh.
5. Zero Defect Zero Effect
The ZED scheme is specifically for what is MSME in the manufacturing sector. Under Zero Defect Zero Effect scheme, every product manufactured for export must adhere to certain standards and have no defects.
Enterprises should produce quality and environment-friendly goods. Such production is also entitled to concessions and rebates.
6. Grievance monitoring system
Under Grievance Monitoring System, MSME owners and other businesses can lodge complaints and provide suggestions. It is a simple procedure online which makes grievance handling faster and transparent.
Every complaint contains a unique registration number. Individuals can use it to track their complaint status regularly online.
7. Quality management standards & Quality technology tools
The government introduced this scheme to inculcate a sense and responsibility for quality production. The QMS and QTT aim to enhance the consciousness of improving quality, reducing rework, using resources effectively, etc. Various campaigns, activities and seminars are organised to execute and promote this scheme.
Know your business requirements first before registering for any of these schemes. You can also avail MSME loans at affordable rates to finance your venture smoothly.