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MSME New Definitions 2021

29-Jun-2021 | MSME

MSME New Definitions 2021

If knowledge is power then constantly updating your knowledge is a superpower. Whether it's personal development or scaling up your business, the more aware you are the better it is. And one form of learning is to keep yourself updated with the latest change in the various rules and regulations. One such rule change has been witnessed in the definition of MSME units and now we have revised definitions of MSME. Read on to find out how you can make the most of these changes to expedite the growth of your business in 2021.

Well if you run a micro or a small or a medium enterprise then you need to be aware of the latest revised definitions of MSME. Knowing these will help you to grow your business in 2021.

Earlier, the MSMEs were defined on the basis of investments that have been put into them, however, now the revised definitions will also include the turnover of the unit as well, and rightly so.

What are Micro Units?

Earlier the criteria was solely on an investment basis. Like:

  1. An investment up to Rs 10 lakh for service units

  2. An investment up to Rs 25 lakh for manufacturing units.

New Definition of Micro Units

An MSMEs will now be called a micro-unit if up to one crore, it can be proprietor own money or through MSME Loan, has been invested into it and it has a turnover of less than Rs 5 crore. Unlike earlier now these two aforesaid factors will define a micro unit. 

New Definition of Small units

As for the small units, the investment limit has been doubled from the earlier rupees 5 crore to rupees 10 crore, now besides that it must have a turnover of less than 50 crore. This new definition encompasses all MSMEs, service enterprises included, earlier service enterprises were under-investment of up to Rs 2 crore category.

New Definition of Medium units

An enterprise that has an investment up to Rs 20 crore along with a turnover of less than Rs 100 crore will now be called a medium unit. Whereas earlier, the investment limit for a medium unit was up to Rs 10 crore and for Service enterprises, the limit was up to Rs 5 crore.


In conclusion, staying updated with the latest changes in rules and regulations is crucial for the growth of any business. The revised definitions of MSME units, which now include turnover as well as investment, provide a more comprehensive framework for classifying micro, small, and medium enterprises. The new definitions allow for a wider range of businesses to be included in each category, and businesses can leverage this knowledge to their advantage. By understanding the revised definitions, businesses can make informed decisions about investments, growth strategies, and potential government benefits. Therefore, it is essential for entrepreneurs and business owners to keep themselves informed and updated about these changes to optimise their business potential in 2021.

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Rakesh Sudan on 06-Jun-2021

One category could be EOUs and Foreign-based Industries


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