The Importance Of Micro, Small and Medium Enterprises (MSMEs)

Small is actually big. The best way to understand this is the fact that the massive economy (say of a country like India) actually consists of numerous tiny, small and medium businesses & the commercial enterprises that create and sustain the lives and livelihood of millions & millions of people across the country. While large companies propel the national economy through their macro-ness and stronger hold over the relevant sector or sectors in which they operate, smaller companies exert a more indirect and subtle influence on the economy of the nation. 

What are Micro, Small and Medium Enterprise?

\Well, in India, these smaller companies are listed under the category, Micro, Small and Medium Enterprises (MSMEs).  This entity is not really small as it sounds. In fact, it is a massive segment which is not only large in its political (read electoral) clout but also plays a prominent role in the acceleration and deceleration of the national and social economy. 

Also read The Benefits Of MSMEs Registration - The God In Small Things.

Previous and Latest MSME Classification

Earlier the existing MSME classification was decided on the criteria of investment in plant and machinery or equipment. So, to get the MSME benefits, the MSMEs have to limit their investment to a lower limit. It is mentioned below:

After the revision, under the Aatmanirbhar Bharat Abhiyan (ABA), the government has changed the MSME classification by including combined criteria of both investment and annual turnover. Besides, the distinction between the manufacturing and the services sectors was removed under the MSME definition. The current revised MSME classification, where the investment and annual turnover are to be considered for deciding an MSME, are as follows: 

Yoiu may also read The MSMED Act, 2006 And Its Amendment In 2018. 

MSME Registration In India

MSME registration is now done completely online. The online registration for MSME is to be done in the government portal of udyamregistration.gov.in. The MSMEs registration may be done under the following two categories in the portal –
1) For the New Entrepreneurs, those who are not Registered yet as MSME or those with EM (Entrepreneurs Memorandum) -II and

2) For those who are registered as Udyog Aadhar Memorandum  (UAM) and are already having registration as UAM through Assisted filing

1)  Procedure - For New Entrepreneurs

The entrepreneurs who are new and the entrepreneurs who are having EM-II registration need to click the button “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” shown on the home page for registering MSME. New registration of MSME is done by entering the Aadhaar card number and PAN number.

When you click on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” button on the homepage of the government portal, it opens the page for registration and asks to enter the Aadhaar number and the name of the entrepreneur. After entering these details, “Validate and Generate OTP Button” is to be clicked. Once, this button is clicked and OTP is received and entered, the PAN Verification page opens.

When verification of PAN is done, the Udyam Registration form will appear and the entrepreneurs need to fill the personal details and details of the plant or industry.

2) Procedure -  For those having registration as UAM

As for those already having registration as UAM, they need to click the option “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing” shown on the home page of the government portal. This will open a page where Udyog Aadhaar Number is to be entered and an OTP option should be selected.

The options provided are to obtain OTP on mobile as filled in UAM or obtain OTP on email as filled UAM. After choosing the OTP Options, “Validate and Generate OTP” is to be clicked. After entering OTP, registration details are to be filled on the MSME registration form and Udyam registration will be complete.

You may also like to read Recent Budgets And The Growing Importance Of MSMEs. 

Documents Required

The only documents required for MSME registration are Aadhaar Card and PAN Card. MSME registration is completely online and no proof of documents is required. PAN and GST linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases. Besides, the Udyam Registration Portal is fully integrated with Income Tax and GSTIN systems.