What are Micro, Small and Medium Enterprises (MSME) and how MSME (Manufacturing) are different from MSME (Services)?

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951). The Manufacturing Enterprise is defined in terms of   investment in Plant & Machinery.
(b) Service Enterprises:  The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under:

Manufacturing Sector

Enterprises

Investment in plant & machinery

Micro Enterprises     Does not exceed twenty five lakh rupees

Small Enterprises     More than twenty five lakh rupees but does not exceed five crore rupees

Medium Enterprises More than five crore rupees but does not exceed ten  crore rupees

 

Service Sector

Enterprises

Investment in equipments

Micro Enterprises     Does not exceed ten lakh rupees:

Small Enterprises     More than ten lakh rupees but does not exceed two crore rupees

Medium Enterprises More than two crore rupees but does not exceed five core rupees