MSME / Udyog Aadhar

MSME is an acronym for micro, small and medium enterprises. In order to facilitates these enterprises, enhance their competitiveness & provide legal framework for recognition of the concept of enterprise, Micro, Small and Medium Enterprises Development (MSMED) Act was notified in the year 2006. A dedicated Ministry of MSME is also in place to promote & growth & development of the MSME sector.

MSME classification as MSMED Act, 2006

Manufacturing Enterprises: Enterprises engaged in manufacturing or production of goods as specified and defined in terms of investment in plant & machinery.
In manufacturing class, maximum limit for investment in plant & machinery is INR 25 lakhs to remain eligible as a micro enterprise.
To be classified as small enterprise, investment in plant & machinery shall exceed INR 25 lakhs but not exceed INR 5 crores.
And, for medium enterprises, investment in plant & machinery should be more than INR 5 crores but up to INR 10 crores only.
Service Enterprises: Enterprises engaged in providing or rendering of services and defined in terms of investment in equipment’s.
In service class, maximum limit for investment in equipment’s is INR 10 lakhs to remain eligible as a micro enterprise.
To be classified as small enterprise, investment in equipment’s shall exceed INR 10 lakhs but not exceed INR 2 crores.
And, for medium enterprises, investment in plant & machinery should be more than INR 2 crores but up to INR 5 crores only.

Udyog Aadhar

Udyog Aadhaar Memorandum is a 12-digit number given to all individuals by the government. Registration with Aadhaar card is a mandatory requirement & it can be done both ways in the online mode or the offline mode Benefit after obtaining UAM is ease in availing credit, loans, and subsidies from the government. There is no fee charged by government for registration of Udyog Aadhar.

Supports, & Schemes for registered MSME

Support available for 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. The Credit Guarantee scheme (CGS) seeks to reassure the lender that, in the event of an MSE unit, which availed collateral- free credit facilities, fails to discharge its liabilities to the lender, the Guarantee Trust would make good the loss incurred by the lender up to 85 per cent of the outstanding amount in default.

Support available for technology upgradation – 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 is provided to the eligible MSEs for upgrading their technology with the well-established and improved technology as approved under the scheme. 48 products/sub-sectors have been approved under the CLCSS till date.

Support available for cluster development – 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; Hard Interventions like setting up of Common Facility Centres (Common Production/Processing Centre, Design Centre, Testing Centre etc.) and creation/upgradation of infrastructural facilities in the new/existing industrial areas/ clusters of MSE.

Support available for Skill Development– The Ministry conducts various types of training programme through its various organisations for self-employment as well as wage employment. All type of programmes has input which provide necessary information and skills to a trainee to enable him to establish his own micro or a small enterprise. The programmes include two-week Entrepreneurship Development Programme (EDP), Six Week Entrepreneurship Skill Development Programme (ESDP). One week Management Development Programme (MDP), One Day Industrial Motivation Campaign (IMC) etc. For Monitoring of the programme, a web-based system has been developed where coordinator of the programme is bound to feed all details of trainees including his photo and phone no. on the website.

Support is provided by the Ministry for improving manufacturing competitiveness – The National Manufacturing Competitiveness Programme (NMCP) is the nodal programme of the Government to develop global competitiveness among Indian MSMEs. This programme targets at enhancing the entire value chain of the MSME sector through the following schemes:

1. Lean Manufacturing Competitiveness Scheme for MSMEs;
2. Promotion of Information & Communication Tools (ICT) in MSME sector;
3. Technology and Quality Up gradation Support to MSMEs;
4. Design Clinics scheme for MSMEs;
5. Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT);
6. Marketing Assistance and Technology Up gradation Scheme for MSMEs;
7. Setting up of Mini Tool Room under PPP Mode;
8. National campaign for building awareness on Intellectual Property Rights (IPR);
9. Support for Entrepreneurial and Managerial Development of SMEs through Incubators.
10. Bar Code under Market Development Assistance (MDA) scheme.

Support is provided by the Ministry to promote energy conservation in the manufacturing process for SMEs- “Technology and Quality Upgradation Support to Micro, Small and Medium Enterprises (TEQUP)” which focuses on two important aspects, namely, enhancing competitiveness of MSME sector through Energy Efficiency and Product Quality Certification.

Support is provided by the Ministry to improve quality of products produced in MSME sector– The TEQUP scheme envisages another activity, namely, Product Quality Certification. The main objective of this scheme is to encourage MSMEs to Acquire Product Certification Licenses from National / International Bodies, thereby improving their competitiveness.

Support is provided by the Ministry to improve design of products produced in MSME sector– 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.

Support is provided by the Ministry to adopt latest Quality Management Standards and Quality Technology Tools (QMS/QTT)– Under the National Manufacturing Competitiveness Programme (NMCP) Scheme, one component is “Enabling MSME manufacturing sector to be competitive through Quality Management Standards/Quality Technology Tools (QMS/QTT)” was initiated in the XIth Five-year plan. The main objective of the scheme is to sensitize and encourage MSEs to adopt latest Quality Management Standards/Quality Technology Tools (QMS/QTT) and to keep a watch on sectoral developments by undertaking the stated activities.

Scheme for assisting MSMEs for 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

Support available for obtaining ISO certification– The Ministry is implementing the ISO: 9001/14001/HACCP Certification Reimbursement Scheme for Micro & Small Enterprises (MSEs) for reimbursement of certification expenses, only to those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and /or Environment Management Systems (EMS)/ ISO14001and / or Food Safety Systems (HACCP) Certification.

Support is provided by the Ministry for enabling MSMEs to get credit rating– The Ministry is implementing the Performance & Credit Rating Scheme, the main objective of the which is to provide a trusted third-party opinion on the capabilities and creditworthiness of the MSMEs so as to create awareness amongst them about the strengths and weakness of their existing operations. This is to provide them an opportunity to improve and enhance their organisational strengths and credit worthiness, so that they can access credit at cheaper rates and on easy terms. NSIC was appointed as nodal agency to implement the scheme on behalf of the Government. Rating under the scheme is being carried out through empanelled rating agencies.

Support is provided by the Ministry for participation of MSMEs in international events– Under the International Cooperation Scheme, financial assistance is provided on reimbursement basis to the State/Central Government organisations, industries/enterprises Associations and registered societies/trusts and organisations associated with MSME for deputation of MSME business delegation to other countries for exploring new areas of MSMEs, participation by Indian MSMEs in international exhibitions, trade fairs, buyer seller meet and for holding international conference and seminars which are in the interest of MSME sectors.

Providing marketing support to MSMEs– The Ministry implements the Marketing Assistance scheme through National Small Industries Corporation (NSIC) Limited for providing marketing support to MSMEs. The main objectives of the scheme is to enhance the marketing competitiveness of MSMEs; to provide them a platform for interaction with the individual/institutional buyers; to update them with prevalent market scenario and to provide them a form for redressing their problems.