The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under: Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

• A. A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
• B. A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
• C. A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722(E) dated October 5, 2006 .

As per the latest announcement on Wednesday, 13th May 2020 by Finance Minister Nirmala Sitharaman a new definition of MSMEs there will be no distinction between a manufacturing enterprise and service sector enterprise.

• A. An enterprise with an investment of up to Rs 1 crore and turnover of Rs 5 crore will be classified as a micro enterprise.
• B. An enterprise with an investment of up to Rs 10 crore and turnover of Rs 50 crore will be classified as a small enterprise, and
• C. An enterprise with investment of up to Rs 20 crore and turnover of Rs 100 crore will be classified as a medium enterprise

Collateral Free Borrowing: The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals/ third party guarantees.

Technology Upgradation Support: Ministry implements a scheme called Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of Micro and Small enterprises in the country. Under the scheme, 15 per cent capital subsidy, limited to maximum of Rs 15 lakh (12 per cent prior to 29.09.2005 limited to maximum of Rs 4.8 lakh) is provided to the eligible MSEs for upgrading their technology with the well-established and improved technology as approved under the scheme.

Cluster Development Program: The Ministry is implementing the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP) wherein support is provided for Diagnostic Study; Soft Interventions like general awareness, counselling, motivation and trust building, exposure visits, market development including exports, participation in seminars, workshops and training programmes on technology upgradation etc.

Skill Development: The Ministry conducts various types of training programme through its various organisations for self employment as well as wage employment. The training programmes are primarily focused to promote self employment in the country. Thus all type of programmes have input which provide necessary information and skills to a trainee to enable him to establish his own micro or a small enterprises.

The National Manufacturing Competitiveness Programme (NMCP) is the nodal programme of the Government to develop global competitiveness among Indian MSMEs. The Programme was initiated in 2007-08.

The Ministry implements the Design Clinic Scheme for Design Expertise to Micro, Small and Medium Enterprises (MSME) Sector is to improve the design of the product to meet global challenges and compete with similar products domestically and internationally. The Ministry implements the Support for Entrepreneurial and Managerial Development of SME’s Through Incubators”. The main purpose of the scheme is to nurture innovative business ideas (new/indigenous technology, processes, products, procedures, etc), which could be commercialized in a year. Under the Scheme, financial assistance between 75% to 85% of the project cost up to maximum of Rs. 8 lakh per idea/unit, provided to Business Incubators (BIs).

Intellectual Property Rights: Under the National Manufacturing Competitiveness Programme (NMCP) to enhance the competitiveness of the SMEs sector, O/o DC(MSME) is implementing a scheme “Building Awareness on Intellectual Property Rights (IPR)” for the MSME. The objective of the scheme is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measure for the protecting their ideas and business strategies. Accordingly, to enable the MSME sector to face the present challenges of liberalisation, various activities on IPR are being implemented under this scheme. There is provision of discounted Govt fees for registration of IP rights.