MSME Turnover Limit for Small-Scale Industries in India

MSMEs (Micro, Small, and Medium Enterprises) have a major role in the development of the Indian economy. The government of India has decided on a turnover limit for MSMEs. If a corporate entity falls under the turnover limit, it will be called an MSME. According to the MSMED Act, MSMEs are divided into two major categories. The first is manufacturing enterprises, and the second one is services enterprises. A manufacturing enterprise will indulge in the production of goods/services.
On the other hand, a service enterprise will distribute the services/goods to the end user. At times, MSMEs might also look for funding options to maintain their turnover. Read on to understand more about MSMEs and the available loan options.

Understanding the turnover limit for MSMEs

MSMEs are the backbone of the Indian economy. The government also offers MSMEs several benefits. For the same reason, there is a pre-decided turnover limit for MSMEs. An enterprise that goes beyond the turnover limit is not considered an MSME. Are you worried about generating MSME finance? Before you worry about other things, know the turnover limit for MSMEs.

The department of MSME came into the picture in 2006. In 2006, the rules were different for MSMEs in India. In 2020, the MSME department made some amendments to the rules for MSMEs. Entrepreneurs planning to start operations must be aware of the latest MSME rules. On 13th of May 2020, the government decided the new turnover limit for MSMEs, which are as follows:

  • Enterprises with an investment of 1 crore and a turnover of 5 crores will be called micro enterprises
  • Enterprises with an investment of 10 crores and a turnover of 50 crores or less will be called small enterprises
  • Enterprises with an investment of 20 crores and a turnover of 100 crores or less will be called medium enterprises

On the 1st of June 2020, the government further changed the rule for medium enterprises. Currently, enterprises with an investment of up to 50 crores and a turnover of 250 crores or less are medium enterprises. The turnover limit for small and micro enterprises remains the same as decided on the 13th of May 2020. So before you search for MSME business loan interest rates, don’t forget to check the turnover of your enterprise. The lender will not provide the assigned benefits if an enterprise does not fall under the MSME category.

Understanding the importance of MSMEs for the economy

Now that you have understood MSMEs’ turnover limit let us discuss their importance. Here are the reasons why MSMEs are essential for the country:

  • MSMEs are responsible for bringing innovation to products, packaging, and manufacturing
  • MSMEs link the domestic markets across the country
  • MSMEs also offer access to different export markets
  • MSMEs create employment in different states and regions
  • MSMEs have a direct impact on the country’s treasury
  • MSMEs help move the country ahead with technology and innovation

As one can see, MSMEs are essential for our country’s growth and treasury. For the same reason, MSME finance is available from different lenders in the country.

Business loans for MSMEs in India

MSME loans can also be referred to as business loans by lenders. MSMEs can require funding at frequent intervals to purchase equipment, pay employee salaries, expand office locations, or acquire raw materials. Whatever the reason, an MSME loan is available without collateral for an enterprise. Usually, MSMEs are developing and cannot put business assets at risk. For the same rationale, MSME loans without collateral are perfect for such enterprises.

The business loan interest rates for MSMEs are low. Enterprises can quickly repay MSME loans and remove overhead debt. A reliable lender like Fullerton India will ask no questions before offering an MSME loan. An enterprise can get up to 50 lakhs as an MSME loan with Fullerton India. The enterprise is allowed to use the MSME loan amount in whatever way it feels.


Is your business fulfilling the MSME turnover criteria? If yes, you are eligible for business loans from reputed NBFCs. With Fullerton India, you can submit the MSME loan application online and get funds to maintain operations. Also, an enterprise will not pledge collateral for an MSME loan. Apply for an MSME loan right away!