MSME Registration

The Government of India has formed the Micro, Small and Medium Enterprises Development (MSMED)Act, 2006 For enterprises dealing in manufacture or production, processing or preservation ofgoods as specified below: Term Investment in plant & machinery Micro enterprise does not exceedRs. 25 lakh Small enterprise more than Rs. 25 lakh but does not exceed Rs. 5 crore Mediumenterprise more than Rs.5 crore but does not exceed Rs.10 crore In case of the above cases,investment in plant and machinery is the original cost excluding land and building and the itemsspecified by the Ministry of Small Scale Industries vide its notification No. S.O. 1722(E) datedOctober 5, 2006 . For enterprises engaged in services and whose investment in equipment includesoriginal cost excluding land, building and furniture, fittings and other items not directlyrelated to the service rendered Term Investment in equipment Micro enterprise does not exceedRs. 10 lakh Small enterprise more than Rs.10 lakh but does not exceedRs. 2 crore Medium enterprise more than Rs. 2 crore but does not exceed Rs. 5 crore.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) set up by the Ministryof MSME, Government of India and SIDBI facilitate flow of credit to the MSE sector withoutcollaterals/ guarantees from third party. The main objective is that the lender should giveimportance to project growth and the credit facility depends on the primary security of theassets financed. The Credit Guarantee scheme (CGS) reassures the lender that in case MSE unitfails to discharge its liabilities to the lender, the Guarantee Trust would make for the loss upto 85% of the outstanding amount in default, incurred by the lender The CGTMSE will providecover for credit facility up to Rs. 100 lakh provided by lending institutions without anycollateral security and /or third party guarantees. To provide guarantee cover, guarantee andannual servicefee is charged by the CGTMSE The guarantee fee and annual service charges are to be paid by theborrower.

A scheme called Credit Linked Capital Subsidy Scheme (CLCSS) for technology up gradation ofMicro and Small enterprises is provided by the Ministry. About 15 per cent capital subsidy,limited to maximum of Rs 15 lakh is provided to the eligible MSEs for upgrading their technologywith the well-established and improved technology as approved under the scheme. 48products/sub-sectors have been approved under the CLCSS till date For a MSE wishing to upgradethe technology must approachto the nodal agencies / eligible financial institution for sanction of term loan for purchase ofeligible machinery.

Under the Ministry’s, Micro and Small Enterprises – Cluster Development Programme (MSE-CDP)support is provided for Diagnostic Study; Soft Interventions like general awareness, counseling,motivation and trust building, exposure visits, market development including exports,participation in seminars, workshops and training programmes on technology up gradation etc;Hard Interventions like setting up of Common Facility Centers (Common Production/ProcessingCentre, Design Centre, Testing Centre etc.)and creation / up gradation of infrastructural facilities in the new/existing industrial areas/clusters of MSEs.

For self employment as well as wage employment, the Ministry conducts various types of trainingprogramme To promote self employment in the country and provide necessary information and skillsto a trainee to make him self-reliant is the main focus The programmes include two weekEntrepreneurship Development Programme (EDP), Six Week Entrepreneurship Skill DevelopmentProgramme (ESDP). One weak Management Development Programme (MDP), One Day Industrial MotivationCampaign(IMC) etc. For Monitoring of the programme a web based system has been developed wherecoordinator of the programme feeds the details of trainees including their photo and phone no.on the website.The details will be linked to the Ministry call centre, where real time feedback is obtainedfrom trainees.

State-of-the-art machinery & equipment equipped Tool Rooms. Providing designing andmanufacturing of quality tools, for producing quality products, and improve the competitivenessof MSMEs in national and international markets. Conduction of training programmes to provideskilled manpower to industries specially MSMEs. The placement of trainees is more than 90%.18 Autonomous Bodies (10 MSME Tool Rooms and 8 Technology Development Centers) under DC (MSME).

The National Manufacturing Competitiveness Programme (NMCP) to develop global competitivenessamong Indian MSMEs. The enhancement of entire value chain of the MSME sector through thefollowing schemes: (a) Lean Manufacturing Competitiveness Scheme for MSMEs; (b) Promoting ofInformation & Communication Tools (ICT) in MSME sector; (c) Technology and Quality Upgradation Support to MSMEs; (d) Design Clinics scheme for MSMEs; (e) Quality ManagementStandards (QMS) and Quality Technology Tools (QTT); (f) Marketing Assistance and Technology Upgradation Scheme for MSMEs; (g) Setting up of Mini Tool Room under PPP Mode; (h) Nationalcampaign for building awareness on Intellectual Property Rights (IPR); (i) Support forEntrepreneurialand Managerial Development of SMEs through Incubators. (j) Bar Code under Market DevelopmentAssistance (MDA) scheme.

Under Ministry’s, “Technology and Quality Up gradation Support to Micro, Small and MediumEnterprises (TEQUP)” focus is on enhancing competitiveness of MSME sector through EnergyEfficiency Product Quality Certification. The basic objective is to encourage MSMEs inadopting Energy efficient technologies as it curtail the cost of energy there by reducingproduction cost and increasing competitiveness and To improve product quality of manufacturingin MSMEs. Under this scheme, Capital subsidy provided to the registered MSME units 25% of theproject cost up to a maximum of Rs. 10.00 lakh Subsidy by the Government ofIndia (GOI) 25% of the project cost Through loan Balance amount funded fromSIDBI/banks/financial institutions.

The TEQUP scheme focuses on Product Quality Certification. Acquiring Product CertificationLicenses from National / International Bodies, for improvement in competitiveness is the mainaim. Subsidy to MSME units is also provided towards the expenditure incurred by them forobtaining product certification licenses from National / International standardization Bodies.Under this Activity, Subsidy to MSME manufacturing units for licensing of product to National/International Standards. 75% of the actual expenditure Maximum GOI assistance for obtainingproduct licensing /Marking to National StandardsRs.1.5 lakh International standards. Rs. 2.0 lakh One MSME unit can apply only once under thescheme period.

Under Ministry’s Design Clinic Scheme for Design Expertise to Micro, Small and MediumEnterprises (MSME) steps are taken to improve the design of the product to meet globalchallenges and compete with similar products domestically and internationally. To create adynamic platform for providing expert solutions to real time Design problems and for addingvalue to existing products. Help MSME manufacturing industries advance the value chain byswitching the production mode from original equipment manufacturing (OEM) to original designmanufacturing (ODM) and hence original brand manufacturing (OBM), is the goal. In the DesignClinic scheme, the value additions to an idea or a concept are provided at a lesser cost.The outcome is new product development by improvement in design and value addition in existingproducts.