The Small enterprises
contribute nearly 40% of the country’s industrial output and offer the largest
employment after agriculture. Therefore,
this sector presents an opportunity to the country to harness its local
competitive advantages for achieving global dominance. In recognition of these aspects, Government of
India enacted the MSMED Act in the year 2006.
The activities of MSME are broadly classified into Manufacturing
Enterprises and Service Enterprises.
Manufacturing Enterprises are those which are engaged in manufacturing
or production of goods. These are defined in terms of investment in Plant & Machinery. Recently, activities such as Seed
Processing (for genetic enhancement) involving collection of germplasm,
cleaning, gravity separation, chemical treatment etc., and Composite unit in
Poultry with Chicken (Meat) Processing are treated as Manufacturing units under
MSME.
Service Enterprises are the enterprises engaged in providing or rendering of services. These are defined in terms of investment in Equipment. Recently activities such as Medical Transcription Service, Production of TV serials / program, Ripening of Raw Fruits under controlled conditions and Service Rating Agency are treated as Service Enterprises under MSME. The modified definitions of Micro, Small and Medium Enterprises are as under: