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Which one of the following is the prescribed investment limit for medium enterprises in the manufacturing sector as per the Micro, Small and Medium Enterprises Development Act. 2006?

Which one of the following is the prescribed investment limit for medium enterprises in the manufacturing sector as per the Micro, Small and Medium Enterprises Development Act. 2006? Correct Answer More than Rs 5 crores and less than Rs 10 crores

The correct answer is More than Rs 5 crores and less than Rs 10 crores.

Key Points

  • Micro, Small and Medium Enterprises:
    • Worldwide, MSMEs have been accepted as the engine of economic growth and for promoting equitable development.
    • They constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth.
    • With low investment requirements, operational flexibility, and the capacity to develop appropriate indigenous technology.
    • MSMEs have the power to propel India to new heights.
    • Hence, it seems like there is a silent revolution happening in India powered by MSMEs.
  • As per the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006)
    • Micro enterprise, - investment in Plant and Machinery does not exceed Rs.25 lakhs.
    • Small enterprise - investment in Plant and Machinery is more than Rs.25 lakhs but does not exceed Rs.5 crore.
    • Medium enterprise - investment in Plant and Machinery is more than Rs.5 crore but does not exceed Rs.10 crores. Hence option 4 is correct.

Important Points

  • Revised Classification applicable w.e.f 1st July 2020​ 
    • ​Micro:- 
      • Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore.
      • Annual Turnover; not more than Rs. 5 crores.
    • Small:-
      • Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore.
      • Annual Turnover; not more than Rs. 50 crore.
    • Medium:-
      • ​Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore.  
      • Annual Turnover; not more than Rs. 250 crore.

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