Definitions

Global trends in classifying the MSMEs show that it widely differs across jurisdictions and depends upon the Government policies of the country. Though, a comparison of some of the countries revealed that most of them are using number of employees as a variable to define MSMEs, in India, MSMEs are presently defined based on investment in plant and machinery / equipment and annual turnover base growth.

To facilitate "ease of doing business", the Government has introduced the new criteria w.e.f 1st July 2020 for classification of MSMEs.