Micro, Small and Medium Enterprises
  • Introduced
    Lok Sabha
    Jul 23, 2018
  • Referred
    Standing Committee
    Oct 04, 2018
  • Report
    Standing Committee Report
    Dec 28, 2018
  • The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2018 was introduced in Lok Sabha by the Minister of State for Micro, Small and Medium Enterprises, Mr. Giriraj Singh on July 23, 2018. The Bill amends the Micro, Small and Medium Enterprises Development Act, 2006.  The Act classifies and regulates enterprises as micro, small and medium enterprises.
  • The Act classifies micro, small and medium enterprises (MSMEs) on the basis of investment in: (i) plant and machinery, for enterprises engaged in the manufacturing or production of goods, and (ii) equipment, for enterprises providing services.
  • The Bill introduces a uniform classification for all MSMEs.  Under the Bill, all MSMEs, whether they are manufacturing or service-providing enterprises, will be classified on the basis of their annual turnover.
  • The changes in the classification of MSMEs are given in Table 1.

Table 1: Classification of enterprises as micro, small and medium enterprises (in Rs)

Type of Enterprise

2006 Act

2018 Bill



All enterprises

Investment in Plant and Machinery

Investment in Equipment

Annual Turnover


25 lakh

10 lakh

5 crore


25 lakh to

5 crore

10 lakh to

2 crore

5 to

75 crore


5 to 10 crore

2 to 5 crore

75 to

250 crore

  • The central government may change these annual turnover limits through a notification. The maximum turnover may be up to three times the limits specified in the Bill.
  • Under the Act, the central government may classify micro, tiny or village enterprises as small enterprises. The Bill seeks to extend this to allow the classification of micro, tiny or village enterprises as small as well as medium enterprises.


DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.