What does MSME mean? Let’s start with the basics - MSME, which stands for Micro, Small, and Medium Enterprises, is the backbone of India’s economy. The term ‘MSME’, introduced for the first time in 2006 by the country’s government, isn’t just a term anymore, as it is a livelihood for millions of people and a hope for a bright future for the country. The true significance of the MSME sector is reflected in the figures, as there are more than 7.9 million registered micro, small, and medium enterprises currently operating in the country. If you still don’t understand what we are trying to emphasize, look at it this way.
Today’s MSME industry segment alone is responsible for one-third of India’s entire GDP; not just that, it’s also the reason over 120 million people have employment across different industries and regions.
The role that the MSME sector plays in the “Atma-Nirbhar Bharat” can’t be underestimated at any cost, and that’s why the Indian government has also been contributing its major part to the growth of this sector. Wondering, How? The Ministry of Micro, Small, and Medium Enterprises has recently introduced a number of schemes and programs to boost new entrepreneurs, especially small businesses. But to avail of the benefit of these, one must register as MSME, or we can say, get MSME Registration.
What is Micro, Small & Medium Enterprises (MSME)?
When does an economy thrive? An economy sees growth with the creation of new enterprises and the development of existing ones. That’s what the Micro, small, and Medium enterprises are doing now. In the movement to strengthen the Indian economy, they are giving a positive direction to the “Make in India” initiative and transforming the country into a global manufacturing giant. Just think, where did you get to hear the term “Entrepreneurship” around a decade ago? But now, the situation is different when entrepreneurial waves are everywhere.
Being responsible for over 45 percent of manufacturing output and 40 percent of exports, Indian MSMEs are impressively meeting the rising demands of both the domestic and international markets. The best part about MSMEs is how they’re dispersed across almost every sector, giving a voice to diversity, be it social, economic, or cultural. Here, the role of the Indian government also cannot be ignored. Apart from offering benefits, such as tax incentives, subsidies, and capital grants, the government is also showing a way to tap the potential of businesses with MSME registration.
For now, the country's people can go for self-employment and make a difference with their skills and knowledge. Here, the major focus of the government is also to promote diversity and inclusivity by bringing the under-represented sections, such as first-generation, women, and marginalized communities to the mainstream economy.
What Does MSME Registration Mean?
MSMEs are enterprises engaged in manufacturing or offering goods and services, respectively, and their continuous development is crucial for the country’s economy. That’s why the government of India has been proactively encouraging them through subsidies, financial assistance, tax incentives, and skill development programs. However, the trick is to enjoy these benefits; eligible businesses must get MSME certificates. With MSME registration, a business gets to open the door to government-backed rewards and incentives, which can be both monetary and non-monetary.
What is an MSME Registration Certificate?
The Ministry of MSME introduced the Udyam Registration Portal with an aim to encourage digitization in India and simplify the processes. This tech system is built to assist small and medium businesses by empowering their growth and providing necessary support.
In India, the Ministry of MSMEs issues the Udyam Registration Certificate, also known as the MSME Registration Certificate. This certification is necessary for seeking legal or operational efficiency for small and medium-sized businesses.
Who can apply for Udyam Registration?
MSME Udyam registration may be applicable to industries associated with manufacturing, wholesale and retail trade that meet the MSME classification requirements. For instance, listed below are entities that are deemed eligible for this registration:
- Startups, business owners
- Sole proprietorship
- Partnership firm registration
- Limited liability Partnerships (LLPs)
- Public & Private Limited company
Is Udhyog Aadhar & MSME Registration the same?
Udyog Aadhar and MSME Registration are often perceived as synonymous, but they are distinct from each other. While Udyog Aadhar was introduced in 2015 for the registration of enterprises, the latter MSME Registration also known as Udyam Registration was introduced in 2020.
After the notification of the new Udyam Portal for the registration of Micro Small and Medium Enterprises, the older Udyog Aadhar became obsolete. All new and old enterprises need to get MSME Registration through the new Udyam Portal. For fresh registrations, no Udyog Aadhar is needed while those who already have a Udyog Aadhar need to migrate their registration to the new Udyam Portal using their 12-digit Udyog Aadhaar number. Currently, the MSME (Udyam) Registration number is a 19-character long alpha-numeric code.
To fully capitalize on the advantages available, it is highly advisable to complete both your MSME and Udyog registrations for your business in India.