Question

Describe the status of Micro, Small and Medium Enterprises (MSME) in India. Explain the registration formalities of Micro, Small and Medium Enterprises also.

Answer 1

develop, organize and manage a business venture along with any of its risks in order to make a profit". While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of start-up businesses have to close due to "lack of funding, bad business decisions, an economic crisis, lack of market deman or a combination of all of these.

Answer 2

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME  industries are the backbone of the economy.

The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.

What are Micro, Small and Medium Enterprise?

MSME are classified into two categories:

i. Manufacturing enterprise; and

ii. Service enterprise.

They are defined in term of investment in Plant and Machinery/ Equipment  as below

MICROSMALLMEDIUMManufacturing EnterprisesRs 2,500,000Less than Rs 50,000,000Less than Rs 100,000,000Service EnterprisesLess than Rs 10,00,000Less than Rs 20,000,000Less than Rs 50,000,000

Registration Process

To do the registration the small and medium scale industry owner has to fill a single form which he can do online as well as offline.If a person wants to do registration for more than one industry then also he/she can do individual registration.To do the registration he/she has to fill a single form which is available at the website which is listed below.The document required for the registration is Personal Aadhar number, Industry name, Address, bank account details and some common information.In this, the person can provide self-certified certificates.There are no registration fees required for this process.Once the detail-filled and upload you would be getting the registration number.

Benefits of MSME Registration

Due to the MSME registration, the bank loans become cheaper as the interest rate is very low around ~ 1 to 1.5%. Much lower than interest on regular loans.There are various tax rebates offered to MSME.It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 yearsThere are many government tenders which are only open to the MSME Industries.They get easy access to credit.Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.Business registered under MSME are given higher preference for government license and certification.There is a One Time Settlement Fee for non-paid amounts of MSME.

Documents Required for MSME Registration

The entity has to submit documents likebusiness address proof, copies of purchase and sale bill, and licenses from regulatory bodies.

Business Address ProofCopies of Sale Bill and Purchase BillPartnership Deed/ MoA and AoACopy of Licenses and Bills of Machinery Purchased