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    Question

    In the Union Budget 2025-26, the government has changed

    the definition of the MSMEs under the MSMED Act, 2006 . Which of the following are the criteria used to define the MSMEs ?
    A Turnover and Profit Correct Answer Incorrect Answer
    B Investment and Profit Correct Answer Incorrect Answer
    C Turnover and investment Correct Answer Incorrect Answer
    D Turnover and paid-up capital Correct Answer Incorrect Answer
    E Turnover, investment and paid-up capital Correct Answer Incorrect Answer

    Solution

    A composite criterion of investment and turnover shall apply to the classification of an enterprise as micro, small or medium.   The definition of micro, small and medium enterprises , under as per MSMED Act 2006 will be amended, as announced in the Union Budget 2025-26 by increasing the investment and turnover limits for classification by  2.5 times and 2 times , respectively. This is expected to improve efficiency, technological adoption, and employment generation.    

    • A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹ 2.5 crore (enhanced from ₹1 crore ) , and turnover does not exceed ₹ 10 crore (enhanced from ₹5 crore ) ;    
    • A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹ 25 crore (enhanced from ₹10 crore ) , and turnover does not exceed ₹ 100 crore (enhanced from ₹50 crore ) ; and  
    • A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹ 125 crore (enhanced from ₹50 crore, and turnover does not exceed ₹ 500 crore (enhanced from ₹250 crore )  

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