Benefits Of MSME Registration in India
Micro, small, and medium enterprises, more known as MSME, are an important sector globally. Minor businesses that do not cross a turnover of Rs. 200 crores at maximum comes under this category. A huge part of our growing population is benefitted from these enterprises as they promised employment options at low-cost investment. Export production from this part of the economic world helps in the country’s current development as well.
With India being a developing country, it becomes even more crucial for the government to support these vendors. The Ministry of Micro, Small, and Medium Enterprises mainly promotes the growth of this segment. MSME registration is under the UDYAM registration, and by this initiative, the ministry hopes to attract more such start-ups and businesses. This allows the opportunity to vouch for a few MSME government benefits.
The registration will require the business head or entrepreneur to submit a few documents like
- Aadhar card
- PAN card
- Number of employees
- Place of organization
- Investment turnover per year
The registration of the company is quite beneficial in many aspects of the business. This process qualifies them for subsidies offered under the MSME Development Act. The central and state governments and union territories have developed unique packages and offer various benefits under schemes directed towards expansion and greater economic contribution from these enterprises.
Sanctions and Laws Under MSME
The main MSME government benefits are easy and early loan sanctions for setting up as well as the progress of these industries considering it the priority sector. The interest rates are slashed, and they also enjoy the benefit of excise exemption and exemption under Direct Tax Laws. There is also a reservation under the Interest on Delayed Payments Act. Tax subsidies, Power Tariff subsidies, and capital investment subsidies are a few support systems for the registered units. The Government encourages the development of specialized industrial estates and sanctions loans readily.
MSMEs contribute nearly 30% of India’s gross domestic product and 45% of the manufacturing output. MSMEs create a vast range of job opportunities for the local community and utilize the local resources, thereby cutting down the cost of production. Furthermore, when this is integrated with the latest technology and modern equipment, productivity can be achieved.
MSME Government Benefits After Registration
- Collateral free bank loan: Small Industries Development Bank of India (SIDBI) established a trust called Credit Guarantee Fund Trust for Micro and small enterprises under which collateral-free loan eligibility is awarded.
- Interest rate exemption: A minimum of 1% benefit on overdraft is made available. The bank offers loans to the businesses on the basis of reported turnover on their GST return.
- Delayed payment protection: The buyers from any registered MSME are required to clear the payments within a period of 15 days of receiving the goods or services, failing which compound interest is levied upon the monthly amounts agreed to be paid. This can be up to three times the rate notified by the RBI.
- Access to international trade fairs: Business delegates from the registered MSMEs are funded by the government of India to participate in international exhibition trade fairs and trades meets or for knowledge exchange in the seminars and conferences held across the globe. This International Cooperation scheme allows exposure to the newer dimension of industrialization.
- Exemptions: Mainly from Stamp Duty and Registration and processing fee for the new industrial units as well as Direct Tax exemption in the initial years of establishment of the unit until profit generation.
- Subsidies: BarCode registration subsidy, ISO certification subsidy, Power tariff concessions, and credit Rating subsidy, NSIC Performance subsidy, IPS-Industrial Promotion subsidy are a few other MSME government benefits.
- Tenders: The Government reserves tenders particularly to the MSMEs in order to promote their growth. In order to help these industries advance technologically, a scheme called the Credit Linked Subsidy scheme is in force for the up-gradation and utilization of technology by these establishments.
- Budgets: Maximum budgetary support in various areas such as participation in exhibitions, capacity building, modern packaging, the revival of traditional industries, creation of common facility centers, and many more.
- Upgradation: Assistance and support to traditional industry artisans to provide them sustainable employment through setting up infrastructure, raw materials, and skill development.
Types of Industries under MSME
Many local and traditional artistry and hallmarks of our community are kept alive by often encouragement and support from our government.
The Coir industry Technology up-gradation scheme
- Maila Coir Yojana
- Pottery activity under Gramodyog
- Bee-keeping Activity
- Agarbatti making Project
- Traditional candy and sweetmeat and savoury industries
- ceramic painting
- leather goods making
- century-old doll making
These are the parts of the rich and vibrant heritage of our proud country that were dying a slow death until they came under the umbrella of support schemes from MSME government benefits.
Marketing and Financial Support
Under the procurement and marketing support schemes, the sector’s marketability of products and services is enhanced. Newmarket access initiatives and awareness about market-relevant topics are created. Tool rooms and technical institutions are established pan India for the development of trained personnel in tooling and related areas. Registered MSMEs have access to enroll their staff for special training programs as well as hire from this industry-ready manpower.
Financial assistance is provided to the artisans who belong to the BPL- Below Poverty Line category. Identification of poor artisan groups is made through an open and transparent process and guided to work for small industries for a regular income, thereby creating a symbiotic relationship between the maker and the mentor.
The schemes, budget plans, credit-free loans, and more are just some of the many profits under MSME registration. This not only acts as a boosting incentive but also, as sets the commercial turnover to global and international levels. The central, and state governments and union territories have developed unique packages and offer various benefits under several schemes. Especially directed towards expansion and greater economic contribution from these enterprises. MSME government benefits can be utilized by all kinds of enterprises.
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