The Indian government has always been in favour of providing benefits to Micro, small and medium enterprises (MSMEs). There are many advantages of obtaining MSME registration in India, which can be only availed if the business has registered itself as an MSME/SSI under MSME Act.


Understanding MSME as per the Law

The Government of India has devised the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. In legal terms, the definition of micro, small and medium enterprises can be best understood as

Enterprise Category Investment in Plant & Machinery
(Manufacturing & Product Industry)
Investment in Equipment
(Service Industry)
Micro Investment in plant and machinery does not exceed INR 25 Lakhs Investment in equipment does not exceed INR 10 Lakhs
Small Investment in plant and machinery is more than INR 25 Lakhs but does not exceed INR 5 Cr Investment in equipment is more than INR 10 Lakhs but does not exceed INR 2 Cr
Medium Investment in plant and machinery is more than INR 5 Cr but does not exceed INR 10 Cr Investment in equipment is more than INR 2 Cr but does not exceed INR 5 Cr
MSME Definition

Benefits of MSME Registration

  • Bank Loans (Collateral Free)
    The Government of India has made collateral-free credit available to all small and micro business sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the GOI(Government Of India), SIDBI(Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.
  • Subsidy on Patent Registration
    A hefty 50% subsidy is given to the Enterprise that has the certificate of registration granted by MSME. This subsidy can be availed for patent registration by giving application to respective ministry.
  • Overdraft Interest Rate Exemption
    Businesses or enterprises registered under MSME can avail a benefit of 1% on the OverDraft as mentioned in a scheme that differs from bank to bank.
  • Industrial Promotion Subsidy Eligibility
    Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.
  • Protection against Payments (Delayed Payments)
    At times, the buyers of services or products from the MSMEs or SSIs tend to delay the payment. The Ministry of Micro, Small and Medium Enterprise lend a helping hand to such enterprises by giving them the right to collect interest on the payments that are delayed from the buyer’s side. The settlement of such disputes must be done in minimum time through conciliation and arbitration.

    In case, if any MSME registered enterprise supplies any goods or services to a buyer then the buyer is required to make the payment on or before the agreed date of payment or within 15 days from the day they had accepted the goods and services from MSME or SCI registered business( if there is no mention of the date of payment).

    If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay compound interest along with interests (monthly) on the amount that was agreed to be paid. The interest rate is three times the rate that is notified by the Reserve Bank of India.

  • Fewer Electricity Bills
    This concession is available to all the Enterprises that have the MSME Registration Certificate by providing an application to the department of the electricity along with the certificate of registration by MSME.
  • ISO Certification Charges Reimbursement
    The registered MSME enterprises can claim the reimbursement of the expenses that were spent for the ISO certification.


MSMEs are rapidly growing with regular support from the government and youths who are inspired and bold enough to start their own venture. Therefore, knowledge about the registration process and its benefits is an absolute must in order to give a boost to the entrepreneurial spirit of MSME & SSI founders.We hope this article helps all of those who might have had any confusion related to the benefits of MSME registration in India and also to those who are willing to jump into an entrepreneur role or are having a Micro, Small to Medium scale business. Business Escalators are the best when it comes to MSME registration online and in providing all types of start-up, GST, MSME, legal and Accounting Support services too.

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