The MSME ministry has understood this fact that if India has to develop it has to grow at least at the rate of 10% per year for the next 10 years. To achieve this in real terms industries have to be promoted and infrastructure has to be built. Here are some reasons of getting registration MSME and Its Benefits . Read now !
The MSME Development Act was enacted in 2006. Micro, Small and Medium Enterprises, coined as MSMEs, have come to become the Indian economy’s major pillar of foundation.
MSMEs enable citizens of a nation to venture out on their own and in turn, give back to society by creating new jobs. It also diversifies an area’s gross domestic production (GDP). They have also slowly and steadily revived the artisan class in the far reaches of India by providing employment, and access to loans and other services to the said class.
In terms of numbers, micro, small and medium enterprises contribute a staggering 30% to the country’s GDP,. It also contributes 45% of the manufacturing output, and approximately 48% of the country’s exports.
MSME And Its Benefits
MSME has a lot of benefits to provide to small and medium businesses that are registered under it. Below are some major benefits among many.
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. The Credit Guarantee Trust Fund Scheme was introduced by the Government Of India, SIDBI(Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise to insure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprises.
Subsidy on Patent Registration
Under the current laws, MSMEs registered with the MSME ministry stand to benefit from a 50% subsidy on their patent registration fees. This encourages small businesses and firms to keep innovating and working on new projects and technologies.
Overdraft Interest Rate Exemption
Businesses and enterprises registered as MSMEs can avail a benefit of 1% on the overdraft in a scheme that differs from bank to bank. This helps to make small businesses secure during unfavorable markets.
Industrial Promotion Subsidy Eligibilty
Businesses that have been registered as MSMEs are eligible for subsidies for Industrial Promotion as provided by the Government.
Protection Against Payment ( Delayed Payments)
MSMEs constantly face the risk of delayed payments which in turn disturbs their entire business. In order to protect registered companies, the Supreme Court has mandated that any buyer of goods or services from registered MSMEs 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 or services. If the buyer delays the payment for more than 45 days after accepting the products or services then the buyer has to pay interest 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 Electicity Bill
All companies that have the MSME Registration Certificate are entitled to concessions on their electric bill. This enables businesses to boost production and take in more orders without worrying about capital expenditure on costs.
ISO Certification Charges Reimbursement
Any registered micro, small and medium enterprise can claim reimbursement of the expenses that were made in order to obtain an ISO certification. This motivates entrepreneurs to get their respective businesses ISO certified which helps them to do business abroad in terms of high-quality exports.
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