Government Revises Criteria for Classifying MSMEs, Effective April 1

New Delhi: The government has announced key changes to the criteria for classifying Micro, Small, and Medium Enterprises (MSMEs), set to take effect from April 1. Under the revised guidelines, micro-enterprises will now be defined as those with investments up to Rs 2.5 crore, a significant increase from the previous threshold of Rs 1 crore. Additionally, the turnover limit for micro-enterprises has been raised from Rs 5 crore to Rs 10 crore.

Small enterprises will now include units with investments up to Rs 25 crore, up from the earlier cap of Rs 10 crore. The turnover threshold for small enterprises has also been doubled, increasing from Rs 50 crore to Rs 100 crore.

Medium enterprises, on the other hand, will now include businesses with investments up to Rs 125 crore, a sharp rise from the previous limit of Rs 50 crore. The turnover limit for medium enterprises has also been increased substantially, from Rs 250 crore to Rs 500 crore.

These changes were initially announced by Union Finance Minister Nirmala Sitharaman in her budget speech, where she proposed raising the investment and turnover thresholds for MSMEs by 2.5 times and two times, respectively.