About micro, small and medium entreprises definition its need, its role in development of economy

1. MSME
Dr.V.O.KAVITHA

2. DEFINITION Latest
 Micro units
 MSMEs will now be called Micro units if they have investments upto Rs 1 crore
and turnover of less than Rs 5 crore. The definition earlier was on investment
criteria of up to Rs 10 lakh for Service MSMEs earlier and Rs 25 lakh or
manufacturing.
 Small units
 Investment in Plant and Machinery or Equipment:
 Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore

3.  Medium units
Investment in Plant and Machinery or Equipment:
Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore

4. There are about twenty-one major
industry groups in the small scale
1.Food products
2.Chemical & chemical products
3.Basic metal industries
4.Metal products
5.Electrical machinery & parts
6.Rubber & plastic products
7.Machinery & parts except electrical
goods
8.Hosiery & garments - wood products
9.Non-metallic mineral products
10.Paper products & printing
11.Transport Equipments & Parts
12.Leather & Leather Products
13.Miscellaneous Manufacturing Industries
14.Other Services & Products
15.Beverages, Tobacco & Tobacco Products
16.Repair Services
17.Cotton Textiles
18.Wool, Silk, Synthetic Fibre Textiles
19.Jute, Hemp and Mesta Textiles
20.Other Services

5. Small Scale sector has emerged as a major
supplier of mass consumption items like
1.Leather and leather goods
2.Plastic and rubber goods
3.Ready-made garments
4.Hosiery goods, sheet metal goods
5.Stationery items - soap and
detergents
6.Domestic utensils
7.Toothpaste and toothpowder
8.Safety matches
9.Preserved foods and vegetables
10.Wooden and steel furniture
11.Paints and varnishes etc.,

6. Among the sophisticated items mention
may also be made of
1.Television sets
2.Calculators
3.Microwave components
4.Plastic film capacitors
5.Carbon film registers
6.Electromedical equipments
7.Electronic teaching aids
8.Digital measuring equipments
9.Air-conditioning equipments
10.Optical lenses
11.Drugs and pharmaceuticals
12.Electric motors
13.Pesticide formulators
14.Photographic sensitised paper
15.Razor blades
16.collapsible tubes,etc.

7. Features of MSMEs
 MSMEs work for the welfare of the workers and artisans. They help them by
giving employment and by providing loans and other services.
 MSMEs provide credit limit or funding support to banks.
 They promote the development of entrepreneurship as well as up-gradation
of skills by launching specialized training centers for the same.
 They support the up-grading of developmental technology, infrastructure
development, and the modernization of the sector as a whole
 MSMEs are known to provide reasonable assistance for improved access to the
domestic as well as export markets.
 They also offer modern testing facilities and quality certification services.
 MSMEs now support product development, design innovation, intervention,
and packaging.

8. Importance of MSMEs for the Indian
Economy
 MSMEs employ around 120 million persons, becoming the second-largest employment
generating sector after agriculture.
 With approximately 45 lac units throughout the country, it contributes about 6.11% of GDP
from manufacturing and 24.63% of the GDP from service activities.
 MSME ministry targets to increase its contribution towards GDP by up to 50% by 2025 as India
moves ahead to become a $5 trillion economy
 Contributing around 45% of overall Indian exports
 MSMEs promote all-inclusive growth by providing employment opportunities, especially to
people belonging to weaker sections of the society in rural areas.
 MSMEs in tier-2 and tier-3 cities help in creating opportunities for people to use banking
services and products, which can amount to the final inclusion of the contribution of MSMEs
for the economy.
 MSMEs promote innovation by providing an opportunity to budding entrepreneurs to help
them build creative products hey and thereby boost competition in business and fuel the
growth.