MSME Definition Further Revised to Energise MSMEs

The Union Cabinet during its meeting on 1st June has approved changes to the definition of micro, small and medium Enterprises (MSMEs). Cabinet approves Upward Revision of MSME definition and Roadmap for implementing remaining two Packages for MSMEs (a) Rs 20000 crore package for Distressed MSMEs and (b) Rs 50,000 crore equity infusion through Fund of Funds.

Enhancing the turnover limit for medium enterprises to Rs 250 crore from the originally announced limit of Rs 100 crores, the government hopes to broaden the scope of MSMEs and enable larger number of firms to take advantage of the measures it has recently announced for the sectors.

While unveiling the Aatmanirbhar Bharat Abhiyaan, FM Nirmala Sitharaman had announced revisions in the definition of Micro Small and Medium Enterprises (MSME). FM had proposed definition for medium enterprises to cover firms with turnover of Rs 100 crore and investment was kept at Rs 20 crore. But this has been enhanced to Rs 250 crores after receiving feedback from several quarters that Rs 100 crores will be a low threshold .

Briefing the media on the cabinet decisions, Union Minister Prakash Javadekar said that the new definition of MSMEs would benefit units.

“Whether these are micro, small or medium enterprises, their export turnover will not be factored in,” Gadkari said.

The cabinet also gave its nod to the proposal for :

  • Provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs. This will benefit 2 lakh stressed MSMEs.
  • Equity infusion of Rs. 50,000 crore for MSMEs through Fund of Funds (FoF). This will establish a framework to help MSMEs in capacity augmentation. This will also provide an opportunity to get listed in stock exchanges.


In the aftermath of COVID-19 pandemic, Prime Minister Shri Modi was quick to recognise the role of MSMEs in building the Nation. As such, MSMEs formed a very prominent part of the announcements made under the Atmanirbhar Bharat Abhiyaan. Under this package, the MSME sector has not only been given substantial allocation but has also been accorded priority in the implementation of the measures to revive the economy. To provide immediate relief to MSME sector, various announcements have been made under the Package. The most important ones also included:

  • Rupees 3 lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw material and restart businesses.
  • Revision of MSME definition to render maximum benefits to the sector;
  • Disallowing global tenders in procurements up to Rs. 200 crores- to create more opportunities for domestic players,
  • Clearing of MSME dues by the Government and Public Sector Units within 45 days.
  • To further ease the burden on MSMEs, RBI has extended moratorium on repayment of loans for another three months.


The MSME ministry has launched MSME CHAMPIONS portal ( for managing and facilitating all MSME schemes under one umbrella.The portal is not only helping and handholding MSMEs in the present situation, but is also providing guidance to grab the new business opportunities and in the long run, become national and international Champions.

MSME Ministry is committed to support the MSMEs, and the people who depend on them. All efforts are being made to encourage MSMEs to take benefit of the initiatives under the Atmanirbhar Bharat package and other schemes.