The concept of facilitating small and medium enterprises can be
traced back to the Industries Development and Regulation Act, 1961.
Under that Act, the government had the power to amend the Act from
time to time in order to ensure the development of small and medium
enterprises. Subsequently, the Micro, Small and Medium Enterprises
Development Act, 2006 was enacted to ensure the promotion and
development of small scale industry. It classifies and regulates
enterprises as micro, small and medium enterprises. This Act
received attention during the "Make in India" campaign of
the new government and the Micro, Small and Medium Enterprises
(Amendment) Bill, 2015 was introduced in the Lok Sabha on 20 April
2015.
The Bill increases the amounts of investment in plant and machinery
for enterprises engaged in the manufacture or production of goods
(pertaining to specified industries) to qualify as micro, small or
medium enterprises, and thus brings more enterprises within the
fold of the regime.
Type of enterprise |
MSME Act, 2006 |
Amendment Bill, 2015 |
Micro |
Up to 25 Lakhs |
Up to 50 Lakhs |
Small |
25 Lakhs to 5 crores |
50 Lakhs to 10 crores |
Medium |
5 crores to 10 crores |
10 crores to 30 crores |
For enterprises involved in the provision of services, the amounts
of investment in equipment have been increased as under:
Type of enterprise |
MSME Act, 2006 |
Amendment Bill, 2015 |
Micro |
10 Lakhs |
20 Lakhs |
Small |
10 Lakhs to 2 crores |
20 Lakhs to 5 crores |
Medium |
2 crores to 5 crores |
5 crores to 15 crores |
The Bill also allows for the Central Government to change these
investment limits through a notification, by up to three times the
specified limits.
In other developments relating to micro, small and medium
enterprises, about 108 micro, small and medium enterprises have
been identified for focused intervention to increase exports in
order to promote the 'Niryat Bandhu Scheme' of the new
government (a scheme to mentor new and potential exporters on the
intricacies of foreign trade).
Originally published June 2015
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