Context:
New MSME classification criteria announced in Union Budget 2025-26, along with enhanced investment and turnover limits.
Enhanced Investment and Turnover Limits:
- Investment Limits: Increased to 2.5 times the previous limits.
- Turnover Limits: Increased to 2 times the previous limits.
- Purpose: To help MSMEs achieve higher efficiencies of scale, technological upgrades, and better access to capital.
Revised classification criteria for MSMEs:
| Type of Enterprise | Investment Limit | Turnover Limit |
| Micro Enterprises | Up to Rs 2.5 crore | Up to Rs 10 crore |
| Small Enterprises | Up to Rs 25 crore | Up to Rs 100 crore |
| Medium Enterprises | Up to Rs 125 crore | Up to Rs 500 crore |
Other Initiatives Announced in the Budget for the MSME Sector:
- Credit Guarantee Cover: Enhanced from Rs 5 crore to Rs 10 crore for micro and small enterprises.
- Customized Credit Cards: Introduction of 10 lakh customized credit cards with a Rs 5 lakh limit for micro enterprises registered on the Udyam portal.
- Export Promotion Mission: To facilitate easy access to export credit and support MSMEs in tackling non-tariff measures in overseas markets.
- New Fund of Funds: A Rs 10,000 crore fund to be set up for startups.
Source: PIB
Previous Year Question
Consider the following statements with reference to India:
1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’, the ‘medium enterprises’ are those with investments in plant and machinery between ₹ 15 crore and ₹ 25 crore.
2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
[UPSC Civil Service Exam – 2023 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (b)
Explanation:
The Government of India on 01.06.2020 decided for upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover. So, statement 1 is not correct.
