To avail the benefits which are provided under the MSMED Act from the Central or State Government and from the Banking Sector, MSME Registration is mandatory.

1. MSME will change the Economy of the
Country.
The scheme, Micro Small & Medium Enterprises (MSMEs) are perfectly defined
under the MSMED Act 2006 on the basis of the capital investments made in plants
and machinery, excluding investments in the lands and buildings of the company.
MSME stands for Micro, Small and Medium enterprises, and these are essentially
the backbone of any developing economy. To support and promote MSMEs all
around the country, the Government of India has been making many efforts
through various subsidies, schemes and incentives on promoting MSMEs through
the MSMED Act. To avail the benefits which are provided under the MSMED Act
from Central or State Government and from the Banking Sector, MSME
Registration is mandatory.
MSME enterprises are a vital part of any economy and is an engine of economic
growth, promoting equitable development for the country. MSME Enterprises are
typically more labor intensive than the other larger corporates and they provide
tremendous employment potential at a very low capital cost. MSME also share a

2. major portion of the industrial production and export in India which eventually on
the other hand plays a pivotal role in the development of industrial economy in
India. Therefore, to promote and develop the MSMEs; the MSMED Act of India
facilitates the promotions and development of enterprises through many
incentives, schemes and subsidies. To facilitate the benefits under the MSMED
Act, MSME Registration is an absolute must and proprietorship firms, partnership
firms, LLPs, Private Limited Company’s and Public Limited Companies could
register themselves.
The MSME registration is not a statutory. However, the MSME registration
process in India have been conceptualized to provide the maximum benefits to all
types of enterprises. After the registration, any enterprise could become qualified
to reap all the benefits offered under the MSMED Act. Some of the benefits from
the Central Government which included easy sanction of bank loans (Priority
sector lending), with lower rates of interest, excise of exemption scheme,
exemption under the Direct Tax Laws and statutory supports such as the
reservation and the interest on the Delayed Payments Act. State Government and
Union Territories also have complied their own package of the facilities and
incentives for the MSMEs. Some of the basic benefits provided by the State
Government of the MSMEs included by the developments made in industrial
estates, tax subsidies, power tariff subsidies, capital investments subsidies and
then any other support. Both the Central and State government works under the
law which targets their incentives and then support of the packages generally to
be units registered with them. Banking Laws, Excise Law and the Direct Taxes Law
which have incorporated to the word MSME in their exemption notifications.
Therefore, the registrated certificates issued by the registering authorities which
are seen as the proof of being MSME and is required to the avail the benefits by
sanctioning for the MSME.
Enterprises which engage in the manufacturing and production, processing or
preservation of the goods, the definitions and subdivisions as following:
 Micro Enterprise: An enterprise where the investment in the plants and
machinery is not exceeding over Rs. 25 lakh.
 Small Enterprise: An enterprise where the investment in the plant and
machinery is more than Rs. 25 lakh but is not exceeding over Rs. 5 crore.

3.  Medium Enterprise: An enterprise where the investment in the plant and
machinery is more than Rs.5 crore but is not exceeding over Rs.10 crore.
In case of the above enterprises, investments in the plant and the machinery is
the original cost excluding the land and building and the other items are as
specified by the Ministry of the Small-Scale Industries.
For the Enterprises engaged in the providing or rendering of the services, the
definition is as follows:
 Micro Enterprise: An enterprise where the investments in equipment is not
exceeding over Rs. 10 lakh.
 Small Enterprise: An enterprise where the investments in equipment is
more than Rs.10 lakh but is not exceeding over Rs. 2 crore.
 Medium Enterprise: An enterprise where the investments in equipment is
more than Rs. 2 crore but is not exceeding over Rs. 5 crore.