Monetary Limits for MSME Classification Revised

The ministry of micro, small, and medium enterprises (MSMEs) has issued a notification enhancing the monetary limits for classification of micro, small, and medium enterprises under the Micro, Small, and Medium Enterprises Development Act of 2006.

The notification amends S.O. 2119 (E), dated the 26th of June 2020, to increase the limit for micro enterprises from ₹1 crore to ₹2.5 crore (investment) and from ₹5 crore to ₹10 crore (turnover). The threshold for classification as small enterprise has been increased from ₹10 crore to ₹25 crore (investment) and from ₹50 crore to ₹100 crore (turnover). Medium enterprises threshold has been increased from ₹50 crore to ₹125 crore (investment) and from ₹250 crore to ₹500 crore (turnover).

The notification is effective from April 1, 2025. The revisions address inflation-related anomalies and broaden the beneficiary pool for schemes and incentives floated for MSMEs by the government.

The announcement of the revision was made in the union budget in February this year aimed at enhancing expansion and improving efficiency. An increase in the credit guarantee cover and a scheme providing financial support to first-time entrepreneurs from disadvantaged backgrounds, as well as sector-specific initiatives to enhance productivity, were also announced.