Micro, Small & Medium Enterprises Development Act, 2006 (6th Edition, 2025)

As we introduce the sixth edition of this book, we recognise the significant changes and strategic efforts made by governments globally to support and strengthen MSMEs in 2024 and 2025. The Government of India has introduced several transformative initiatives to empower MSMEs, reflecting a deep commitment to their development. ​ Some of the key initiatives are:

• Updated MSME Classification Criteria: To reflect the changing business environment, the criteria for classifying MSMEs got revised. The investment limit for micro enterprises is raised from INR 1 crore to INR 2.5 crore, and the turnover limit from INR 5 crore to INR 10 crore, allowing more businesses to qualify and expand their operations.
• Expanded Credit Guarantee Scheme: The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was enhanced to offer collateral-free loans to MSMEs, with the guarantee cover increased to INR 10 crore. This initiative was designed to make financing more accessible and support business growth.
• Mutual Credit Guarantee Scheme: This scheme is introduced to simplify access to financing for MSMEs, offering a 60% guarantee cover for loans up to INR 100 crore. It is designed to support the acquisition of new machinery, equipment, and plant infrastructure, thereby enhancing manufacturing capabilities and promoting investment in advanced technologies.
• Launch of the MSME Credit Card Scheme: A dedicated credit card scheme is introduced for micro enterprises, offering credit limits of up to INR 5 lakh. This Scheme aimed to simplify the process of securing working capital and make credit more accessible to small businesses.
• Creation of Fund for Startups: A significant fund has been established with a Corpus of INR 10,000 crore to support startups across different industries, enhancing their access to capital and encouraging innovation and entrepreneurship.
• Adoption of the Trade Receivables Discounting System (TReDS): To tackle the issue of delayed payments, it is mandated that all companies with a turnover over INR 250 crore and Central Public Sector Enterprises (CPSEs) join the TReDS platform by March 31, 2025. This step aimed to ensure timely payments to MSMEs, improving their cash flow and financial health.
• Enhancement of the PM SVANidhi Scheme: The PM SVANidhi scheme for street vendors was upgraded to offer higher loan amounts and UPI-linked credit cards, aiming to improve financial inclusion and support the growth of street vendors.
• Introduction of the National Manufacturing Mission: A comprehensive mission was launched to strengthen the ‘Make in India’ initiative, providing policy backing and resources to MSMEs, with the goal of boosting manufacturing capabilities and enhancing competitiveness in the global market.

These initiatives reflect a holistic approach to addressing the challenges faced by MSMEs, aiming to create a conducive environment for their growth and sustainability. As the readers go through the chapters of this book, you will find details about these initiatives.