What does MSME stand for?
Micro, Small, and Medium Enterprises (MSME) is the full form of Micro, Small, and Medium Enterprises. These are small-sized businesses based on their investment, and they fall under priority sector financing, which means they have a better chance of securing a larger loan with a reduced interest rate. Small scale industries, or SSIs, are another term for them.
The definition of the MSME has been revised following the declaration by Finance Minister Nirmala Sitharaman.
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There is a limit to the interest of entrepreneurs to grow under the current definition because they are unable to scale up their businesses further, and the MSME classification is different for both services and manufacturing. In the amended definition, there is no differentiation between manufacturing and services, and the composite criteria of both investment and annual turnover are incorporated.
How can a small business get registered?
MSME registration is not difficult or time-consuming, and it can be completed quickly:
- To register, the owner must fill out a single form, which can be completed online or offline.
- Using a single form, you can register for different industries.
- The single form can be found on the website, at https://e-msme.org/.
- The registration number is issued after all of the details have been filled out and uploaded.
- Udyog Aadhar is the new name for the MSME certificate.
What are the advantages of registering as an MSME?
- Bank loans are less expensive – The interest rate is roughly 1 to 1.5 percent, which is lower than the usual loan interest rate.
- Rebates on taxes – If MSMEs are registered, they are eligible for a variety of tax breaks. Instead of 10 years, the credit for Minimum Alternate Tax can be carried forward for up to 15 years.
- Patent Registration Subsidy – On the patent registration, the owner receives a 50% subsidy.
- Exemption from the use of an overdraft facility – The owner receives a 1% interest rate discount on the overdraft facility, significantly lowering the cost.
- Reservations and tenders from the government – Around 300 products have been reserved under the Central Government’s Government Storage Purchase Program, and the owners have access to government tenders, licenses, and certificates.
- Assist with technological advancement – MSMEs can access loans at a lower rate of interest through the Capital Aid for Technological Upgradation Scheme, which allows them to upgrade their technology.
- Customers’ payment delays are protected by safeguards – The buyer must pay on the due date, or within 15 days of receiving the product or service if no due date has been specified.
- International Trade Fair Participation – Udyog Aadhar Registration assists MSME in promoting their firm globally through trade fairs, which may be highly costly if the government does not support them.
- Bar Code Machine Subsidy or Registration – The Bar Code Registration is available to retail businesses that are registered with Udyog Aadhar. The use of bar code technology on products aids in obtaining government subsidies.
- Benefits of Octroi for MSME – For exporting or importing commodities, the entrepreneur has the option of paying the Octroi through Udyog Aadhar.
- On the GST Platform, you can apply for a loan – If the entrepreneur possesses a valid UAM Registration number and a Udyog Aadhar Certificate, he or she is qualified to apply for an MSME loan through the GST site.
- Industrial Promotion Scheme Eligibility – MSME companies with a Udyog Aadhar number are eligible for the Industrial Promotion Scheme, which provides them with a special economic zone benefit from the government.
- Loan limitations are being raised – The entrepreneur benefits from the Udyog Aadhar scheme by being able to increase the loan amount in order to build his or her business.
- Subsidy in the ISO certificate of registration – Small businesses can’t afford an ISO certificate, but thanks to the Udyog Aadhar Certificate, they can receive an ISO Registration Certificate and conduct their business according to international standards.
- Commercial Electricity Bill Discount – If a person’s firm is in manufacturing or production, this scheme provides a discount on the Commercial Electricity Bill.
- Credit ratings and performance of the NSIC – Because NSIC has a high weightage for government tenders and projects, Udyog Aadhar registration is necessary for participation in any sort of government tender.
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What are the government’s MSME initiatives?
The following are some of the government’s MSMEs initiatives:
Entrepreneurship Incubators –
The government funds 70% to 80% of the project costs to assist innovators in inputting new designs, ideas, or products into action.
Subsidy for Credit-Linked Capital –
The banks are providing a capital subsidy as part of the scheme. Entrepreneurs are given assistance in upgrading their businesses as a result of technology improvements.
Schemes for Women Entrepreneurs –
Various government programs, such as the Bharatiya Mahila Bank and the Annapurna Scheme, provide capital, counseling, training, and delivery methodologies to help women entrepreneurs operate their businesses.
Trust Fund for Micro and Small Business Credit Guarantees –
The Trust Fund will guarantee 75% of the loan amount to the banks. SIDBI and the Government of India have contributed to the fund.