The MSMEs, or the Micro, Small, and Medium Enterprises play a vital role in the economic growth of the developing nations.
To further strengthen the growth and development of the MSMEs, the Ministry of Micro, Small & Medium Enterprises offers a wide range of benefits, schemes, programs, and reward-based competitions that offer global-level exposure to registered MSMEs.
Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in fostering economic growth and employment opportunities. Recognizing their significance, the Government of India has implemented various initiatives to support and empower these enterprises. One such initiative is MSME registration, now known as Udyam Registration.
Understanding MSMEs and Udyam Registration – Micro, Small, and Medium Enterprises are classified based on their investment in plant and machinery or equipment, and their annual turnover.
The Udyam Registration process aims to streamline the identification and classification of these enterprises, offering them a range of benefits, including financial assistance, easier access to credit, and various government schemes.
Udyam Registration brings various advantages for registered businesses. These include priority sector lending, eligibility for government subsidies, and protection against delayed payments.
Additionally, MSMEs registered under Udyam can avail of various concessions, making it a pivotal step for businesses looking to thrive in a competitive market.
MSME has a significant contribution to the socio-economic development of the country and is often referred to as the foundation of our economy. The Indian government has continually exhibited its support for small-scale industries and the unorganized business sector.
The Ministry of MSME indirectly aids the government in dealing with the crisis of unemployment. There are 6,08,41,245 MSMEs actively running operations across the country, and they generate 45% employment, 50% exports, and 95% industrial units.
Once you have registered your enterprise on Udyam, you can take advantage of tax benefits, subsidies, MSME loans, and much more. Here are a few advantages of MSME Udyam registration in India –
1. Banks & Govt offer collateral-free loans
The Government of India launched the Credit Guarantee Fund Scheme (CGS) to give collateral-free loans to the micro and small sector industries.
The Indian government, in association with the Ministry of Micro, Small and Medium Enterprises (MSME), and the Small Industries Development Bank of India (SIDBI), started the Credit Guarantee Fund Trust (CGTMSE) to allocate credit for small and micro-level enterprises.
The finance minister declared a collateral-free automatic loan of up to 3 lakhs crore for small businesses to recover their debts and losses during COVID-19.
2. Reservation policies for the manufacturing sector
Development and Regulation Act, of 1951 is considered a crucial act in favor of SSI (Small Scale Industries) that provides reservation policies for the exclusive manufacture of items. COVID-19.
3. Direct Exemptions on Income Tax
As mentioned in the government scheme, the businesses registered under MSME get a direct exemption from income tax for the first year of business, depending on their activities. It offers a major relief for enterprises from detailed bookkeeping habits and complex auditing processes.
4. A Subsidy for Bar Code Registration
Businesses registered at MSME get subsidies for bar code registration. Barcodes are given in the form of numbers and parallel lines, which are readable through machines. Barcodes are essential to keep track of goods in the entire process of supply and chain management.
5. Support Against the delay of payment
The Ministry of Micro, Small, and Medium Enterprises protects the right of interest and A delay in payment of goods from the buyers. An act emphasizes conciliation, arbitration, and settlement of disputes within a minimum time limit.
If the enterprise registered under the MSME Act is a supplier of goods, buyers are responsible for clearing dues earlier than the date of the agreement. 15 days are allowed for payment in case the date is not mentioned, but it cannot exceed 45 days.
6. Minimum interest rates of banks
An interest rate is lower for enterprises under MSME. The targets of banks include a 20% hike in credit to micro and small businesses, a 10% annual growth in bank accounts of micro, and small enterprises, and a 60% growth in lending credits to the small-scale industries. Enterprises registered under MSME benefit from the quick granting of loans for their initial run in the market.
15% subsidy of CLCSS
Credit Linked CGSTI Subsidy Scheme (CLCSS) is a scheme of The Ministry of Micro, Small, and Medium Enterprises (MSME) for the technological upgradation of businesses. The government of India launched the scheme in October 2000, and it offers a 15% subsidy which cannot go beyond 15 lakhs. The maximum limit of loans for subsidy calculation under the scheme is 100 lakhs.
7. Concession in payment of electricity bill
Enterprises having a registered certificate of MSME get a concession on electricity bills if they apply to the electricity department.
8. Reimbursement of ISO certification
MSME-registered businesses can get total exemption ISO certificate charges if they send an application with the registration certificate to the respective authority. ISO certification is required to promote the standards of enterprises registered as MSMEs at the time of bidding to multiply their performance.
9. 50% subsidy for registration of patent
Businesses registered with MSME own a 50% subsidy in patent registration after making such an application with an MSME certificate.
Conclusion
The MSME sector in India is filled with immense potential. To strengthen their capacity and resilience, the Government of India has launched several programs providing support to existing enterprises and encouraging the creation of new enterprises.
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The MSMEs are and will continue to act as engines of sustained economic growth, equitable creation of opportunities, and elimination of the rural-urban divide. MSME tends to grow rapidly in the coming years. The government keeps implementing various policies and regulations for the development of micro and small-scale industries by incorporating them with other public or private institutes.