Why are MSMEs important?
MSMEs – an abbreviation of Micro, Small & Medium enterprises- are India’s second-largest job creators after agriculture, despite the fact that agriculture sector’s contribution to GDP is less than MSME. The MSME sector is seen contributing to around 30% the GDP while providing employment to more than 120 million people through about 65 million MSME Units, which is noteworthy given that a large section of the workforce in the nation lacks vocational skills. The MSME sector also demonstrates the entrepreneurship spirit of India.
A strong MSME sector is empowered to absorb the emerging workforce, especially the migrants from the agriculture sector, providing an answer to one of the biggest issues faced by the government today – the gap between employability and employment.

In the recent judgement of Delhi High Court dtd. April 7, 2018, in the matter of M/S Ramky Infrastructure Private Limited vs. Micro and Small Facilitation Council & Anr. W.P.(C) 5004/2017, wherein it has been held that an entity which falls within the definition of the micro/small enterprise will be treated as a ‘supplier’ under Section 2(n) of the MSMED Act even if it has not filed a Memorandum as required under Section 8(1) of the MSMED Act.
Enterprises | Investment in plant & machinery |
Micro Enterprises | Does not exceed Rs.25Lacs |
Small Enterprises | More than Rs.25Lacs but does not exceed Rs.5crores |
Medium Enterprises | More than Rs.5crores but does not exceed Rs.10crores |
Service Sector
Enterprises | Investment in equipments |
Micro Enterprises | Does not exceed Rs.10Lacs |
Small Enterprises | More than Rs.10Lacs but does not exceed Rs.2crores |
Medium Enterprises | More than Rs.2crores but does not exceed Rs.5crores |