The revised criteria for classifying MSMEs, earlier announced during the Union Budget 2025-26, will take effect from April 1, 2025.
New Criteria for classification

Significance of MSMEs
- Employment Generation: With 5.93 crore registered MSMEs employing more than 25 crore people.
- Economic Output: MSME-related products accounted for 45.73% of India’s total exports in 2023-24.
- Contribution to GDP: MSMEs' Gross Value Added (GVA) increased from 27.3% (2020-21) to 30.1% (2022-23).
- Other: Help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.
Challenges to MSMEs
Infrastructure bottlenecks; Issues with formalisation; Inertia to technology adoption; Limited backward and forward linkages; Lack of access to credit and risk capital; Delayed payments etc.
Initiatives for MSMEs
- Udyam Registration Portal: Platform for facilitating registration of enterprises.
- PM Vishwakarma: To provide comprehensive support to artisans and craftspeople, improving their socio-economic status and quality of life.
- Prime Minister’s Employment Generation Programme (PMEGP): Credit linked subsidy scheme for providing employment opportunities through establishment of micro-enterprises in the non-farm sector.
- Scheme of Fund for Regeneration of Traditional Industries (SFURTI): To organize traditional artisans into collectives or clusters.