Explain the classification of small scale industries according to the MSMED Act, 2006

As per the MSMED Act, 2006, small enterprises are classified into manufacturing and service enterprises based on their investment in plant and machinery or equipment (excluding land and buildings) as indicated below:

  1. Micro enterprise : Investment limit is upto Rs.25 lakhs in case of a manufacturing unit and it is Rs.10 lakhs in case of a service unit.
  2. Small enterprise : For manufacturing units, more than Rs.25 lakhs and upto Rs.5 crores. For service unit more than Rs.10 lakhs and upto Rs. 2 crores.
  3. Medium enterprise: In case of manufacturing unit more than Rs.5 crores and upto Rs.10 crores and in case of service unit more than Rs.2 crores and upto Rs.5 crores.