INTRODUCTION
MSMEs, or Micro, Small, and Medium Enterprises, have emerged as a major pillar of the Indian economies foundation. These businesses are categorized as follows:
MSMEs empower citizens to go out on their own and, in turn, give back to society by creatingnew jobs and diversifying an area’ s gross domestic product (GDP). They have also gradually andsteadily revived the artisan class in India’s far reaches by providing employment, loans, and otherservices to the said class.
Furthermore, they consistently support technological advancement, infrastructure development, and the modernization of the country and our society as a whole. In terms of numbers, micro, small, and medium enterprises contribute a staggering 30% of the country’s GDP, as well as approximately 45 percent of manufacturing output and approximately 48 percent of exports.
It’s because of this that they’ re so important to our economic development, and why they’ve been in the news nonstop since the pandemic began in early 2020. However, as the pandemic subsidesand the economy gradually recovers, there will be more opportunities for business owners tocomplete their MSME registrations and reap a variety of benefits.
To assist MSMEs, the Indian government introduced the MSME (Amendment) Bill of 2018 andre-emphasized the MSME Act of 2006. There would be no need for frequent inspections underthese laws to ensure that the necessary investments in plant and machinery were made.
Furthermore, MSMEs operations would be permitted to continue in a transparent, non-discriminatory, and objective manner.
Some of the additional benefits of registering your MSME under the provisions of these laws aresummarized in the section below.
1.Bank Loans (Collateral Free)
All small and micro-business sectors in India now have access to collateral-free credit, thanks tothe Government of India. This initiative provides funds to micro and small businesses. Benefitsare available to both old and new businesses under this scheme. The Government of India,SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, andMedium Enterprises established the Credit Guarantee Trust Fund Scheme to ensure that theCredit Guarantee Scheme is implemented for all Micro and Small Enterprises.
2. Subsidy on Patent Registration
Under current legislation, MSMEs registered with the MSME ministry are eligible for a 50%subsidy on patent registration fees. This motivates small businesses and firms to continueinnovating and developing new projects and technologies. Subsidies can be obtained bysubmitting an application to the relevant ministries.
3. Overdraft Interest Rate Exemption
Businesses and enterprises registered as MSMEs can benefit from a 1% discount on theiroverdraft in a scheme that varies by bank. This contributes to the security of small businesses during unfavourable market conditions.
4. Industrial Promotion Subsidy Eligibility
Businesses that have been registered as MSMEs are eligible for government subsidies forindustrial promotion.
5. Protection against Payments (Delayed Payments)
MSMEs are constantly exposed to the risk of late payments, which disrupts their entireoperation. To protect registered businesses, the Supreme Court mandated that any buyer of goodsor services from registered MSMEs make payment on or before the agreed-upon date of paymentor within 15 days of accepting the goods or services. If the buyer delays payment for more than45 days after accepting the products or services, the buyer must pay interest on the agreed-uponamount. The interest rate is three times higher than the rate announced by the Reserve Bank ofIndia.
6. Fewer Electricity Bills
All businesses with an MSME Registration Certificate are eligible for electric bill discounts. Thisallows businesses to increase production and take on more orders without having to worry aboutcapital expenditures on costs such as electricity and maintenance. Micro, small, and medium-sized businesses can apply for the concession by submitting an application to the department ofelectricity along with their registration certificate.
7. ISO Certification Charges Reimbursement
Any registered micro, small, or medium-sized business can claim reimbursement for expenses incurred in obtaining ISO certification. This encourages entrepreneurs to obtain ISO certification for their respective businesses, which allows them to do business abroad in terms of high-quality exports.
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