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There was a time when agriculture dominated India's economy. Much of it is promoted today by creativity, technology, and products produced by micro, small, and medium-sized enterprises.

While India's growth story has been guided by agricultural improvisation and the development of service industries in the last century, in this century, it is mainly small innovative business improvisations in the technology, manufacturing, and service industries that fuel economic growth and investment.

The Government has recommended what is known as the MSME registration to incentivize further business owners to take the risk of becoming a structured system – whether micro, small or medium. Whether you are an established business owner or have a future idea that can be created, there are the distinct benefits that an MSME Registration can confer.

Eligibility for Registration

In addition to micro, small and medium-sized business organizations, limited liability partnerships, private and one-person enterprises, proprietorship firms, and public corporations can also apply for MSME registration.

Although small and medium-sized terms are standard, the Government has prescribed unique turnover and expenditure limits for determining the applicability of the MSMED Act to decide if a business falls under the micro, small or medium category.

Regarding units in the manufacturing sector, investments in plants and machinery are considered, and for units in the service sector, investment in equipment is considered, the threshold limits are determined.

Micro category: If the investment in the manufacturing sector does not exceed 25 lakh rupees or a stake in the service industry does not exceed 10 lakh rupees, you are eligible for registration in the micro category. Since output requires a greater asset base and input costs, the threshold has been kept high.

Small category: If the investment in the manufacturing sector does not exceed five crore rupees or a stake in the service industry does not exceed two crore rupees, you are eligible for a limited registration category.

Medium category: If the investment in the manufacturing industry does not exceed ten crores or if the investment in a service industry does not exceed five crore rupees, you are eligible for medium-class registration.

Benefits Of SME Registration   

The advantages of MSME registration will enable you in your company to create, strengthen and build acceptable business models.

  1. Priority Lending: Our first value to MSME is priority lending. Whether one is a proud owner of a state-of-the-art technology business or a masala packing company, rural women's jobs, credit and loans are what your business will eventually require for long and short-term financing. Banks, by the directions provided by the Reserve Bank of India, have certain allocated funds which must be made mandatory to MSMEs. Producing MSME certificate benefits entitling one to take advantage of this loan on a priority basis with fewer problems.
  2. Lesser interest rates and availability and access to higher credit: In the absence of collateral protection (any property/cash provided as protection against a loan), it could be challenging for many business owners to obtain a loan for starting in their industry. With an MSME registration, however, all banks are expressly instructed to offer mortgages at lower interest rates than average, and many banks can avail this for financing needs.
  3. Income Tax exemption: There are many advantages of MSME registration which can save lakhs of the amount that would be taxable in the absence of this certificate. Enterprises have the benefit of a presumptive tax base, which relieves them from holding detailed account books and auditing procedures.
  4. Capital and non-capital grants for infrastructure development: Since MSMEs are an employment-generating sector and promote entrepreneurial projects, the Government also recognizes training sectors for MSMEs and provides capital grants for infrastructure improvisation and support for entrepreneurial growth.
  5. Reimbursement of ISO Certification: For promoting the standards and certifications obtained by MSMEs in an attempt to boost their performance across sectors, all registered micro and small industries can take advantage of an exemption from all expenses incurred in obtaining certifications ISO 9000, ISO 14001 and HACCP.
  6. Shelter from the rivalry and exclusive purchases: As a part of MSME Market Development Assistance Program, a strategy of Price and Purchase Preference is adopted by the central Government. More than 358 products from the medium, micro and small units are classified under it for exclusive purchases by the Central Government.
  7. Help to MSMEs for technology and quality upgrading: To increase cost-effectiveness and encourage the use of renewable energy, the Government reimburses project costs as well as costs incurred for the introduction of new technology, the preparation of audit reports and subsidies for licensing goods in compliance with national and international standards.
  8. State sector support and Export Promotion: The Indian Government organizes many foreign exchange programs, art fairs, exhibits, and trade-related activities. Being classified as a micro, small or medium-sized enterprise provides access to all of these channels for international collaboration with different countries on trade-related issues and promotes new business relations. The Government also encourages MSMEs to export goods and services increasing subsidies, tax exemptions and technical assistance.
  9. Credit Linked Guarantee Scheme: The Ministry of MSME and the Indian Small Industries Development Bank (SIDBI) have established a trust called the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) primarily for the implementation of the Credit Guarantee Fund Scheme for micro and small businesses. This system allows up to 50 lakhs of collateral-free loans for single MSMEs.

Dispute Resolution Mechanism through MSME Council

Any Micro or small enterprise registered with MSME Enterprises, Govt. of India and having valid UAM ( Udyog Aadhar Memorandum)  can apply to a ‘Micro and Small Enterprises Facilitation Council’ of the state having jurisdiction to entertain the matter regarding dispute resolution where any buyer fails to make payment of the amount to the supplier the buyer and such amount to due to be paid shall be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day from the date immediately following the date agreed upon, at three times of the bank rate.

1. Procedure: MSME Samadhaan is a Portal created by the Office of DC(MSME), Ministry of Micro, Small and Medium Enterprises (MSME) where Micro and Small Enterprises (MSEs) can file their applications online regarding delayed payments. The application once filed is forwarded automatically online to the concerned Micro and Small Enterprise Facilitation Council (MSEFC) established by the State/UTs as per the provisions of MSMED-Act 2006. Action on the applications regarding delayed payment is taken by the concerned MSEFC only. Physical applications can also be filed at the concerned MSEFC. After submission, the application is automatically forwarded online to concerned MSEFC. Therefore, concerned MSEFC is to be contacted after filing the application online on MSME Samadhaan Portal. The contact address of concerned MSEFC is mentioned on the acknowledgement sent on the registered email of the applicant.

2. Registration of UAM number: Registration for Udyog Aadhaar can be done online   on the official website of Ministry of MSME free of cost at the following address :

3. Arbitration: The Council shall either conduct conciliation themselves or seek the help of any institution for conducting conciliation. However, if the conciliation between the parties is not successful, the Council shall either take up the dispute for arbitration or refer the matter to any institution for providing Alternate Dispute Resolution under the provisions of Arbitration & Conciliation Act 1996. The Council has jurisdiction itself to act as an Arbitrator or Conciliator for any dispute within its jurisdiction although the buyer may be located anywhere in India. This Section also mandates that every reference u/s 18 shall be decided within a period of 90 days from the date of filing of the reference.


The registration process for MSMEs offers multiple rewards and benefits, including monetary and non-monetary. These advantages of MSME registration are linked to the company's entrepreneurial and trade growth. For enjoying the benefits of MSME registration for your micro, small or medium-sized enterprise, you can without-fail opt for MSME registration.

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