Ministry of Micro, Small and Medium Enterprises
The Ministry of MSME is the nodal body responsible for formulating and administering laws
and regulations pertaining to MSMEs in India. Headquartered in New Delhi, the ministry
oversees:
 Udyam Registration and issuance of MSME certificates.
 Promotion, growth, and technological advancement of MSMEs.
 Coordination with state governments, financial institutions, and other ministries to
enhance MSME competitiveness.
MSME New Definition
The government has notified significant revisions to the turnover and investment criteria for
classifying MSMEs, which will come into effect from April 1. Micro, Small, and Medium
Enterprises (MSMEs) with investments up to Rs 2.5 crore will now be classified as micro-
enterprises, up from the previous threshold of Rs 1 crore. The turnover limit has also been
revised from Rs 5 crore to Rs 10 crore.
Units with investments up to Rs 25 crore will be classified as small enterprises, from the
earlier Rs 10 crore. The turnover limit for such enterprises has been doubled from Rs 50
crore to Rs 100 crore.
MSMEs with investments up to Rs 125 crore will now be classified as medium enterprises,
from the earlier limit of Rs 50 crore. For medium enterprises, the turnover limit has been
doubled to Rs 500 crore. During her budget speech, Union Finance Minister Nirmala
Sitharaman had announced new classification criteria for MSMEs, with investment and
turnover limits for the classifications proposed to be increased to 2.5 times
and two times, respectively.


MSME Classification Latest: Key Highlights
The MSME classification latest revision is significant for both new entrants and existing
businesses:
 Higher Ceilings = Greater Flexibility: Enterprises no longer need to worry about
crossing older thresholds too quickly. They can invest in machinery, technology, and
manpower to enhance competitiveness.
 Holistic Assessment (Investment + Turnover): By considering turnover, the
government ensures that the classification reflects a business's actual market
presence, not just its capital expenditure.


 Reduced Compliance Burden: With standardised and unified definitions across
manufacturing and services, documentation and compliance requirements are more
straightforward.
 Inclusive Economic Growth: By expanding the range of MSMEs, more companies
can benefit from government schemes such as credit guarantees, subsidies, and
easier loan availability.


New MSME Classification Criteria as per Union Budget
2025
ENTERPRIS
E
CATEGORY


CURRENT
INVESTMEN
T LIMIT


REVISED
INVESTMEN
T LIMIT


CURRENT
TURNOVER
LIMIT


REVISED
TURNOVER
LIMIT


Micro
Enterprise


₹1 crore ₹2.5 crore ₹5 crore ₹10 crore


Small
Enterprise


₹10 crore ₹25 crore ₹50 crore ₹100 crore


Medium
Enterprise


₹50 crore ₹125 crore ₹250 crore ₹500 crore


The revised MSME definition, as announced in the Union
Budget 2025, may come into effect from April 1, 2025. Once
implemented, the updated investment and turnover limits will be
used to classify businesses as Micro, Small, or Medium
Enterprises.


Benefits of Revised MSME Classification
o Expanded Eligibility: The revised classification increases investment limits
by 2.5 times, bringing more businesses under the MSME umbrella.
o Access to Incentives & Financial Aid: This expansion ensures better
access to incentives, financial aid, and growth opportunities for a wider range
of businesses.
o Easier Growth: It makes it easier for enterprises to grow without losing
MSME benefits.
Stay Informed
Stay updated with the latest tax changes and plan wisely to make the best use of
newly revised MSME definition. Visit our website at www.moderntaxconsultant.com
for continuous updates