The MSME scheme is launch by the Government of India under this scheme govt. help financially to all the Micro to Medium units. This Scheme is successfully run by the Government of India and encourages our country's young generation to self-employment.
In current conditions, these MSME units support
a lot to our country's economic growth in a holistic manner.
In
developing countries like India, MSMEs are the backbone of the economy. These
units contribute at a large scale to the socio-economic development of the
country. Every state and central government has always encouraged MSMEs and
provide direct benefits to them. It also helps to generate employment.
You
can only take all the benefits of this scheme if your business has registered
under the MSME/SSI Act. As per the revised definition of MSMEs, there are two types
of categories as manufacturing and as service enterprises.
Sectors under MSME Scheme
As
per the MSME Development Act, 2006, the MSME industry has two 2 sectors: the
manufacturing sector and the service sector. In India, the manufacturing end of
the industry comprises at least 6% of the GDP and the service end contributed
to almost 25% of the GDP.
As
enshrined within the provision, the Manufacturing Sector has the following classification, based on investment in Plant
& Machinery:-
1. Micro
Enterprise: Up to Rs. 25 Lakhs.
2. Small
Enterprise: More than Rs. 25 Lakhs but less than Rs. 5 Crores.
3. Medium
Enterprise: More than Rs. 5 Crores but less than Rs. 10 Crores.
For
the service sector, the
classification based on investment in equipment is as follows:-
1. Micro
Enterprise: Up to Rs. 10 Lakhs
2. Small
Enterprise: More than Rs. 10 Lakhs but less than Rs. 2 Crores.
3. Medium
Enterprise: More than Rs. 2 Crores but less than Rs. 5 Crores.
How
to register your unit under the MSME scheme and all documents formalities?
Aadhaar Card and PAN
Card are the only documents required for MSME registration. MSME
registration is fully online and no proof of documents is required. PAN and GST
linked details on investment and turnover of enterprises will be taken
automatically by the Udyam Registration Portal from the Government databases.
1. 50% Subsidy on Patent
Registration
If
you have created something new, a new innovative product or business model, and
want to patent it, there is a hefty fee applied for patent registration. But
with the help of MSME registration, one can avail of the patent registration at
50% subsidy. This move aims to encourage more entrepreneurs to invent and
innovate. They can avail of the 50% subsidy by registering with their respective
industry.
2. Collateral Free Loans
One
of the biggest benefits of MSME registration is the collateral-free
business loans one can avail of through banks and NBFCs.
This essentially means that SMEs and MSMEs can now take various loans such as
working capital loans and credit line loans, without providing any collateral.
3. Exemption of interest on Overdraft
MSMEs
who have good credit history and have good relations with their banks can avail
themselves of the overdraft facility. MSMEs get the advantage of a 1% exemption
on interest on an overdraft facility. This could be extremely beneficial for
MSMEs. However, MSMEs should check with their lender as not all banks give this
facility.
4. Reservation Policy
As
mentioned above one of the greatest things about the MSME market is that it has
hardly been affected by outsiders. Due to this, the success of the MSME sector
has been magnificent. A major part of this success is due to the reservation
policy of the government. Some MSME sectors have been given exclusive rights to
manufacture certain products. Under the Government Stores Purchase Program, the
central government has reserved the purchase of more than 300 products fully
from this sector. This gives a boost to the MSME market and it is not affected
by stiff competition.
5. Technological Upgradation for
MSME’s
Some
MSMEs may not be able to use their resources to their full potential due to a lack
of sophisticated technology. The government, under the Capital Aid for
Technological Upgradation Scheme, helps these enterprises to upgrade their
equipment through the latest technology by helping them get low-interest loans
from banks. With the rise of technology, the government is encouraging more
MSMEs to get into the space of technology through aid and financial support.
6. Protection against delayed
payments
One
of the major advantages of registering under the MSME scheme is the protection
received by the government against delayed payments. This protection in delayed
payments is against the buyers in the transaction of business.
In
case there is no payment date on the agreement, then the buyer is required to
make payment within fifteen days of acceptance of goods or services. In case of
delayed payment, the buyer is required to pay a fine to the MSME registered
company. This helps most MSMEs to ensure they have no outstanding debtors or
bad debts.
Conclusion:-
I hope this article will help all of
those who might have had any confusion related to the benefits of MSME
registration in India and also to those who are willing to startup or are
having a Micro, Small to Medium scale business. Business escalators are the
best when it comes to MSME registration online. So, register yourself under the
MSME scheme and get various benefits that could uplift your business.
For more
details please visit https://msme.gov.in/sites/default/files/MSME_Schemes_English_0.pdf
Feel free to mention in the comments
section, if I have missed any benefits of MSME registration in India.
Thank you for visiting my blog
Comments