MSME : Structure & Benefits

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.

The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per msme.gov.in). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.

Even if the Company is in the manufacturing line or the service line, registrations for both these areas can be obtained through the MSME act. This registration is not yet made mandatory by the Government but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.

The MSME became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises.

Benefits of MSME Registration

1. Due to the MSME registration, the bank loans become cheaper as the interest rate is very low around ~ 1 to 1.5%. Much lower than interest on regular loans.
2. There are various tax rebates offered to MSME.
3. It also allowed credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
4. There are many government tenders which are only open to the MSME Industries.
5. They get easy access to credit.
6. Once registered the cost getting a patent done, or the cost of setting up the industry reduces as many rebates and concessions are available.
7. Business registered under MSME are given higher preference for government license and certification.
8. There is a One Time Settlement Fee for non-paid amounts of MSME.

“ The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.” – Vince Lombardi

“In order to succeed, your desire for success should be greater than your fear of failure”. – Bill Cosby

” Strive not to be a success, but rather to be of value.” – Albert Einstein

“ Happiness lies in the joy of achievement and the thrill of creative effort.” – Franklin D. Roosevelt“You have brains in your head. You have feet in your shoes. You can steer yourself, any direction you choose.” – Dr. Seuss