What is the full form of MSME ?

MSME Full Form: Micro, Small & Medium Enterprises

Spread the love

MSME full form or meaning is Micro, Small and Medium Enterprises.

What is MSME?

 MSME is a popular acronym in the business sector. The full form of MSME is the Ministry of Micro, Small and Medium Enterprises. This definition of MSME is given according to the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.

It is an initiative by the Indian Government. This government body MSME is responsible to administrate and formulate the rules, laws, and regulations regarding Micro, Small, and Medium Businesses.

According to the MSMED Act, 2006 there are two types of enterprises such as –

  • Manufacturing enterprises that produce goods, and
  • Service enterprises that provide a specific type of service
MSME full form
MSME full form

What are the Criteria for MSME?

 To be eligible as an MSME applicant an enterprise or business needs to have a specific qualification. The MSME ministry of India defines an enterprise as MSME based on their Investment.

For manufacturing enterprises, their plant and machinery investment limits them to be MSME and for service enterprises, their equipment investment is considered.

Here are the criteria for enterprises to register as MSME –

Manufacturing>Rs 25 lakhRs 25 lakh – Rs 5 croreRs 5 cr – Rs 10 cr
Service>Rs 10 lakhRs 10 lakh – Rs 2 crRs 2 cr – Rs 5 cr


What are the Benefits of MSME registration?

Here are the common benefits an enterprise get while registering under the ministry of MSME –

  • MSME gets collateral-free credit under the Credit Guarantee Scheme
  • This MSME registration provides to pay fewer Electricity Bill
  • These MSME’s can claim the compensations of the ISO certification spending
  • These enterprises will be qualified to get a subsidy for Industrial Promotion as suggested by the Indian Government
  • MSME can take advantage of 1% interest rate exemption on the Over Draft in any bank
  • MSME can have 50% subsidy on patent registration
  • The government provides protection to MSME against delayed payments on the buyer’s side by letting the enterprise to charge compound interest along with monthly interest

 How many MSME are there in India?

According to an estimate for the financial year 2020, there are over 60 million MSME in India.

As specific, there are 63.05 million micros, 0.33 million small, and more than 5000 medium enterprises registered. Most MSME enterprises are from rural areas than the developed or urban parts of the country.

The highest number of MSME’s business that contains 14.20 per cent of total MSMEs in the country is from Uttar Pradesh state.

What are the Problems of MSME?

 Even though the Government provides a lot of opportunities and benefits to the enterprises registered under the MSME scheme these enterprises have to face many challenges. Here are the few problems that an MSME often face –

  • Non-availability of needed technology and innovation
  • They have to face restrictions to modernize and to expand their business
  • Non-adequate knowledge of technology and finance
  • Unskilled employees
  • Inadequate capitals to grow the production
  • Lack of sufficient and on-time banking finance
  • Slow production capacity and high logistic cost
  • Vain and lack strategic marketing practices
  • Paper and document work in government offices is time-consuming and stressful due to lack of awareness and manpower
  • Unproductive factors

Why is MSME needed?

 India is a middle-class based country. Its economy stands in the middle-class industry. That is why there are more small and medium-sized businesses in India rather than big companies.

These MSMEs not only generate employment in the small areas but also acts as the backbone for the Indian industrialized section.
Difference between MSME and SME?

 SME stands for Small and Medium Enterprises. It is a global term where MSME is a specific term that adds Micro businesses as well.

The only difference between MSME and SME is that SMEs include businesses by characterizing them based on their turnover and employees working.

On the other hand, MSME follows a classification based on the turnover or revenue of the enterprise.

Interesting facts about MSME

  • MSMEs have a huge contribution to India’s total GDP and by 2020 this contribution has reached more than 30%
  • MSMEs also contribute a lot in providing employment to people and today around 60 million people work in MSMEs.
  • A large number of MSMEs are starting today due to the help of the government

Some other full forms of MSME

MSME- Mean square Model Error (in Academics)

MSME- Master of Science in Mathematics Education (in Academics)

Similar full form

RBI full form

GDP full form

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletter to get latest updates and news

We keep your data private and share your data only with third parties that make this service possible. See our Privacy Policy for more information.

DMCA.com Protection Status