The Government of India has revised the classification criteria for Micro, Small, and Medium Enterprises (MSMEs), effective from April 1, 2025. This update was announced by Finance Minister Nirmala Sitharaman during the Union Budget 2025–26 presentation.
The revision aims to facilitate business expansion, encourage the adoption of advanced technologies, and enhance access to financial resources while ensuring that enterprises continue to benefit from MSME-related incentives. These changes are expected to improve operational efficiency, enhance competitiveness, and generate employment opportunities within the sector.
Updated MSME Classification Criteria
| Enterprise Category | Previous Investment Limit | Revised Investment Limit | Previous Turnover Limit | Revised Turnover Limit |
|---|---|---|---|---|
| Micro | ₹1 crore | ₹2.5 crore | Up to ₹2.5 crore | Up to ₹10 crore |
| Small | ₹10 crore | ₹25 crore | Up to ₹25 crore | Up to ₹100 crore |
| Medium | ₹50 crore | ₹125 crore | Up to ₹125 crore | Up to ₹500 crore |
Key Changes and Their Implications
1. Increased Investment and Turnover Limits
The investment and turnover thresholds for all MSME categories have been substantially increased, enabling more businesses to qualify for MSME benefits.
2. Enhanced Growth Opportunities
The revised classification framework is designed to support enterprises in expanding their operations, improving resource accessibility, and integrating advanced technology.
3. Simplified MSME Classification
The updated definition provides a more straightforward classification process, making it easier for businesses to understand and comply with the criteria.
4. Inclusion of Retail and Wholesale Trade
The new guidelines extend MSME benefits to retail and wholesale traders, particularly in terms of priority sector lending access.
5. Customized Credit Cards for Micro Enterprises
Micro-enterprises registered on the Udyam portal will be eligible for customized credit cards with a credit limit of ₹5 lakh, enhancing financial flexibility.
These changes mark a significant step toward strengthening the MSME sector, fostering economic growth, and ensuring greater financial inclusion.
Sources: Various press and media reports.
