Law & Policy News

Central Govt notifies upward revision in definition and criteria of MSMEs; New definition to come into effect from July 1

Bar & Bench

The Ministry of Micro, Small and Medium Enterprises, Government of India has issued the Gazette notification to enforce the upward revision in the definition and criteria of MSMEs in the country.

The new definition and criterion of MSMEs will come into effect from July 1, 2020.

A revision in MSME definition under the MSME Development Act, 2006 was announced by the Central Government in the Atmnirbhar Bharat package of May 13, 2020.

As per the revised definition and criteria, the definition of Micro manufacturing and services units has been increased to Rs 1 Crore of investment and Rs 5 Crore of turnover.

The limit of small unit stands increased to Rs 10 Crore of investment and Rs 50 Crore of turnover.

Similarly, the limit of medium unit was proposed to be increased to Rs 20 Crore of investment and Rs. 100 Crore of turnover.

However, pursuant to representations from stakeholders, the Central Government of India decided in favour of further upward revision and now, for medium unit, the threshold is Rs 50 Crore of investment and Rs 250 Crore of turnover.

As part of new definition, Exports will not be counted in turnover for any enterprises whether micro, small or medium.

Apart from upgrading the definition and criteria of MSMEs, the Central Government has also done away with the difference between manufacturing and service sectors.

Detailed Guidelines and Clarifications as regards the classification in pursuance of the changed definition will be issued separately by the MSME Ministry.

It is also informed that a "handholding mechanism" for MSMEs and new entrepreneurs in the name of Champions ( has been put in place for the benefit of interested Enterprises/People.

Read the Press Release:

PIB Release - MSMEs.pdf
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