Context:
Industry bodies representing micro, small, and medium enterprises (MSMEs) have asked the government to exempt MSMEs with turnovers below â‚ą 5 crore from unnecessary audits and inspections unless major discrepancies are detected.
Micro, Small and Medium Enterprises (MSME)
MSME stands for Micro, Small and Medium Enterprises. These are businesses that are relatively small in budget and have limited operations. MSMEs are a vital part of the Indian economy, contributing to employment, industrialization, and the socio-economic development of the country.
The MSMED Act of 2006 defines the classification of MSMEs, which was revised in 2020:
- Micro
- Investment in plant and machinery or equipment is less than â‚ą1 crore, and turnover is less than â‚ą5 crore
- Small
- Investment in plant and machinery or equipment is less than â‚ą10 crore, and turnover is less than â‚ą50 crore
- Medium
- Investment in plant and machinery or equipment is less than â‚ą50 crore, and turnover is less than â‚ą250 crore
