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Benefits of MSME Registration in India

February 8, 2021

The Micro, Small and Medium Enterprises (MSME) in India constitute over 90% of India’s total enterprises. According to statistics, the MSME’s contribute towards approximately 40% of total exports and 30% of India’s GDP (Gross Domestic Product). MSMEs also act as a major source of employment and employ over 110 million people across the nation[1]. With a view to promote the country’s economy and promote local products in the market, the Indian Government has been floating several schemes which provide a further impetus to the MSME’s in India. The Government has launched various beneficial schemes to enhance the growth of the MSMEs which are duly registered with the Ministry of MSME. Hence, registered MSMEs can avail benefits under the Government Schemes and also obtain licenses and approvals from respective Governmental authorities in a simplified manner.

MSME Classification in India

The new classification of the enterprises under the Micro, Small and Medium Enterprises Development (MSMED) Act 2006, is provided below for your ready reference:

S. No. Type of Enterprise Annual Turnover Investment in Equipment
1 Micro Does not exceed Five Crore INR (< Rs. 5 Crore) Does not exceed One Crore INR (< Rs. 1 Crore)
2 Small Does not exceed Fifty Crore INR (<Rs. 50 Crore) Does not exceed Ten Crore INR (< Rs. 10 Crore)
3 Medium Does not exceed Two Hundred Fifty Crore INR (<Rs. 250 Crore) Does not exceed Fifty Crore INR (< Rs. 50 Crore)

Benefits available to MSMEs in India

The various benefits available to MSME’s in India are enumerated below:

S. No. BENEFIT DESCRIPTION NATURE OF ASSISTANCE WHO CAN APPLY HOW TO APPLY
1.  

Avail Loans without Collateral

 

Ministry of MSME, Government of India and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for MSEs (CGTMSE) to implement Credit Guarantee Fund Scheme for Micro and Small Enterprises. The corpus of CGTMSE is being contributed by GoI and SIDBI.

 

Collateral free loans up to a limit of Rs.100 lakh – for individual MSEs.

 

 

 

 

Registered Micro and Small enterprises.

 

 

Candidates meeting the eligibility criteria may approach banks/financial institutions, which are eligible under the scheme, or scheduled commercial banks and select Regional Rural Banks

2.  

Subsidy on Patent Registration

A subsidy limit of 50% of the total filing cost or a maximum of 15 Lakh INR per invention- whichever is lesser, has been set and this subsidy can be availed for patent registration by giving application to respective ministry. One-time financial support limited up to Rs.2 lakh for foreign patent, Rs. 25,000 for domestic patents; for registering under geographical indications of goods act, one time financial support limited up to Rs.1 lakh.

 

This support scheme can be applied at any stage of international patent filing by the applicant.

 

Registered Micro, Small and Medium enterprises.

 

 

 

 

Application forms for each of the components are given with scheme guidelines at:

http://www.dcmsme.gov.in/schemes/IPR10.pdf,

3.  

Subsidy on Trademark Filing

Reduction in 50% official fees for e-filing of TM applications.

Filing an application for registration of a trademark is Rs. 5000 (Paper Filing) / Rs. 4500 (e-filing and expedited processing of an application for registration of a trademark is Rs. 20000 (e-filing only).

The new rules offer 50% discount on the official fees for MSE’s (small and medium enterprises) with respect to filing an application for registration of a trademark and for expedited processing of an application for registration of a trademark.  

Registered Small and Medium enterprises.

 

Application forms for each of the components are given with scheme guidelines at:

http://www.dcmsme.gov.in/schemes/IPR10.pdf,

4.  

Protection and Interest on Delayed Payment

The micro, small and medium enterprise development (MSMED) act, 2006 contains provisions of delayed payment to micro and small enterprise (MSEs). State governments have established micro and small enterprise facilitation council (MSEFC) for settlement of disputes on getting references/filing on delayed payments.  

In case of a payment default, the MSMED Act enables the MSEs to issue a MSME Civil Notice after 45 days from the day of the default, and ensures the recovery of the delayed payment within a year.

 

Registered Micro and Small enterprises.

 

MSMED Act, 2006 (Section 15-24)

 

https://samadhaan.msme.gov.in/MyMsme/MSEFC/MSEFC_Welcome.aspx

5.  

Jurisdictional Advantage in case of Recovery of Debt

Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the Centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.  

The Plaintiff (MSEs) are allowed to file an application for the recovery of delayed payments in the jurisdiction where the enterprise is registered and not where the defaulter is, thus making it convenient for the MSEs to recover the debt owed to them.

 

Registered Micro and Small enterprises.

 

MSMED Act, 2006 (Section 18 (4))

6.  

Credit Facilitation Through Banks for Technology Upgradation

 

 

To meet the credit requirements of MSME units, NSIC has entered into a memorandum of understanding with 24 nationalized and private sector banks. Through syndication with these banks, NSIC facilitates MSME in accessing credit support (fund based or non-fund based limits) from the banks. The objective of the Scheme is to facilitate technology up-gradation in MSEs by providing an upfront capital subsidy of 15 per cent (on institutional finance of up to Rs 1 Crore availed by them) for induction of well-established and improved technology in the specified 51 sub-sectors/products approved  

Registered Micro, Small and Medium Enterprises.

http://www.NSIC.co.in/Schemes/Credit-Facilitation-Through-Bank.aspx
7.  

Reimbursement of ISO Certification Expenses

In order to enhance the competitive strength of SMEs, the Government has introduced an incentive scheme for their technological upgradation/quality improvement and environment management. The scheme provides incentives to those SMEs/ancillary Related scheme ISO 9000/ISO 14001 Certification. The scheme is enlarged so as to include reimbursement of expenses for acquiring ISO 14001 certification. The scheme envisages reimbursement of charges for acquiring ISO-9000/ ISO- 14001/ HACCP certification to the extent of 75% of expenditure subject to a maximum of Rs.75, 000 in each case.  

Registered Micro and Small enterprises.

 

MSEs with their EM No. are required to submit their application, duly completed, to their local Director, MSME-DI addresses given in the following website:

 

www.dcmsme.gov.in

 

8.  

Purchase and Price Preference Policy

The objective of Policy is promotion and development of Micro and Small Enterprises by supporting them in marketing of products produced and services rendered by them. However, the policy rests upon core principle of competitiveness, adhering to sound procurement practices and execution of supplies in accordance with a system which is fair, equitable, transparent, competitive and cost effective.  

358 items are reserved for exclusive purchase from MSME by the central government. Other facilities include tender documents free of cost, exemption from earnest money and security deposit and 15% price preference in central government purchases for individual MSMEs

 

 

Registered Micro, Small and Medium

9.  

Zero Defect Zero Effect

The scheme is an extensive drive of the Government of India to enhance global competiveness of MSMEs by providing them financial support in assessment, rating & hand holding of its manufacturing processes on quality and environment aspects. The subsidy provided by the Government of India for Micro, Small & Medium Enterprises will be 80%, 60% and 50% respectively. There shall be an additional subsidy of 5% for MSMEs owned SC/ST/women

 

 

Registered Manufacturing Micro, Small & Medium Enterprises

 

Application Form:

 

http://assessment.zed.org.in/Assessment/Assessment_BeforeLogin.aspx

Funding Schemes available for MSMEs in India

In order to encourage MSMEs and support manufacturing and industries in India under the Start-Up India initiative and schemes like Atmanirbhar Bharat, wherein the Government has launched more than 100 schemes to provide funding, collateral free loans and other benefits such as technology and quality upgradation, raw material assistance, marketing assistance, working capital requirement facility, global & national tender notices, self-web development tool, centralized mail system, free mail boxes, payment gateway for membership subscription, popular products section and unlimited global trade leads amongst others. The Women Entrepreneurs and Entrepreneurs from weaker sections of the society are given added incentives in these scheme to promote involvement of all members of a society generating more employment opportunities. Some of the initiatives set up by the Government of India under Start Up India Program for funding and providing various incentives to MSMEs some of which are:

Also read India: INR 1K Crore ‘Start-Up India Seed Funds’ Announced

  1. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
  2. Credit Facilitation Through Bank
  3. Small Industries Development Bank of India (SIDBI)
  4. National Manufacturing Competitiveness Programme (NMCP)
  5. Infomediary Services
  6. Raw Material Assistance Scheme
  7. Pradhan Mantri MUDRA Yojana (PMMY)
  8. Ambedkar Social Innovation Incubation Mission (ASIIM)

Production Linked Incentive (PLI) Scheme

The abovementioned schemes are intended to take forward Government of India’s ‘Make in India’ campaign and with emphasis on providing financial aid to smaller enterprises within the MSME sector. These schemes are expected to benefit large no of small enterprises and would also generate employment in India.

[1] https://www.livemint.com/news/india/msmes-the-growth-engines-of-the-indian-economy-11597923225239.html

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