In a significant move aimed at boosting the Micro, Small, and Medium Enterprises (MSMEs) sector, the Union Budget 2025-26 has introduced new classification criteria, revising both investment and turnover limits to promote growth and job creation.
The investment limit for MSME classification has been increased 2.5 times, while the turnover limits have been doubled. This revision is expected to give MSMEs the confidence to expand and generate more employment opportunities for the youth.
Revised MSME Classification Criteria:
| Category | Investment (₹ Crore) | Turnover (₹ Crore) |
|---|---|---|
| Micro Enterprises | Increased from 1 to 2.5 | Increased from 5 to 10 |
| Small Enterprises | Increased from 10 to 25 | Increased from 50 to 100 |
| Medium Enterprises | Increased from 50 to 125 | Increased from 250 to 500 |
Impact on MSMEs:
This move is anticipated to enhance the growth trajectory of MSMEs, enabling them to scale operations and compete more effectively in both domestic and global markets. The revised limits will also help businesses retain their MSME status as they grow, allowing continued access to government schemes and incentives.
India has over 1 crore registered MSMEs, employing 7.5 crore people.
MSMEs contribute 45% to India’s exports and 36% to the manufacturing sector.
The revised criteria reflect the government’s focus on strengthening the MSME sector, which is the backbone of the Indian economy, playing a pivotal role in employment generation, export growth, and industrial development.
