What is meant by MSME ?

MSME stands for Micro, Small, and Medium Enterprises [1]. These enterprises are defined and governed under the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006. The sector is a vital component of the Indian economy, contributing approximately 30% to the country's GDP and 45% to manufacturing output [3]. In 2020, the Government of India revised the classification criteria, moving to a composite system based on investment in plant and machinery and annual turnover. Under the current definition, a 'Micro' enterprise has an investment up to ₹1 crore and turnover up to ₹5 crore; a 'Small' enterprise has an investment up to ₹10 crore and turnover up to ₹50 crore; and a 'Medium' enterprise has an investment up to ₹50 crore and turnover up to ₹250 crore [2].

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > Role of government in the promotion of MSME sector: > p. 235
2. [3] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > 7.5 Micro Small and Medium Enterprises (MSME) > p. 234
3. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > Micro; Small and Medium Enterprises Development (MSMED) Act 2006 > p. 236