The most awaiting amendment took place in the definition of micro, small and medium enterprises after the announcement made by the Finance Minister Smt. Nirmala Sitaraman on 13^th May 2020.The government announced a package of 20 Lakh Crores to support the business comes under the MSME sector.

It is become the Hot Topic of discussion that what is MSME, which business activities comes under MSME,how to get registration under MSME, what are the benefits that a business can reap out the registration under MSME, Constitution of Business, and Major Announcement made by Finance Minister for MSME . So in present blog we have made an attempt here to address precisely the activities comes under MSME, and activities not included under MSME.

What is MSME

It is known as MICRO (in Hindi it is ‘Suksham’), Small (In Hindi it is termed as “Laghu”) & Medium (In Hindi it is termed as “Madhyam”) Enterprises.

A separate Ministry is there which is looking after the matter related to MSMEs. Further, an Act namely Micro Small & Medium Enterprises Act, 2006 is also there to the benefit of MSMEs.

Before the announcement of amendment the Micro Small or medium Enterprises Development Act 2006 was provided for classification of enterprises engaged in manufacturing or production of goods as well as enterprises engaged in providing or rendering of services as micro, small and medium based on investment in plant and machinery and equipment respectively.

Now after the amendment as announced, there are two broad changes in the definition of MSMEs, the separate investment limits as manufacturing unit and service unit are done away with and In addition to the Limits of Investment, Turnover Limits are to be seen in order to test the eligibility

Existing MSME Classification
Criteria  :  Investment in Plant & Machinery or Equipment
Classification	Micro	SmallB	Medium
Mfg. Enterprises	Investment <Rs. 25 Lac	Investment <Rs. 5 Cr	Investment < Rs. 10 Cr.
Service Enterprises	Investment <Rs. 10 Lac	Investment < Rs. 2 Cr	Investment <Rs. 5 Cr.
Revised MSME Classification
Composite Criteria  :  Investment And Annual Turnover
Classification	Micro	Small	Medium
Manufacturing & Service Enterprises	Investment <Rs. 1 Cr And Turnover <Rs, 5 Cr	Investment <Rs. 10 Cr And Turnover <Rs, 50 Cr	Investment <Rs. 20 Cr And Turnover <Rs, 100 Cr

Activities Covered under MSME Act 2006 eligible for registration.

The Micro Small or medium Enterprises Development Act 2006 provides for classification of enterprises engaged in, manufacturing or production of goods as well’ as enterprises engaged in providing or rendering of services as micro, small and medium. The following table dissipates the activities covered under MSME with 2-digit NIC code (National Industrial Code)

NIC Code (2 Digit)	Activity	NIC Code (2 Digit)	Activity
01	Crop and Animal Production, hunting and related service activities	49	Land transport and transport via pipelines
05	Mining and quarrying	50	Water Transport
06	Extraction of Crude, Petorl and Natural Gas	51	Air Transport
07	Mining of Metal Ores	52	Warehousing and support activities for transportation
08	Other mining and quarrying	53	Postal and Courier activities
09	Mining support service activities	55	Accommodation
10	Manufacture of Food products	56	Food and beverages service activities
11	Manufacture of beverages	58	Publishing activities
12	Manufacture of tobacco products	59	Motion Picture, Vedeo and Television programme production, sound recording and music publishing activities
13	Manufacturing of textiles	60	Broadcasting and programming activities
14	Manufacturing of wearing apperals	61	Telecommunication
15	Manufacture of lether and related products	62	Computer programming, consultancy and related activities
16	Manufacture of wood and products of wood and cork except furniture, manufacture of articles, of straw and plaiting materials	63	Information Service activities
17	Manufacture of paper and paper products	64	Financial service activities, except insurance and
18	Printing and reproduction of recorded media	65	Insurance, Reinsurance and Pension funding except compulsory social security
19	Manufacture of coke and refined petroleum products	66	Other financial activities
20	Manufacture of chemicals and chemical products	68	Real Estate Activities
21	Manufacture of pharmaceuticals, medicinal, chemical and botanical products	69	Legal and accounting activities
22	Manufacture of rubber and plastic products	70.	Activates of head offices, management consultancy activities.
23	Manufacture of of other non-metallic mineral products	71.	Architecture and engineering activities, technical testing and analysis
24	Manufacure of basic metals	72.	Scientific Research and development
25	Manufacture of fabricated metal products, except machinery and equipments	73	Advertising ank Market Research
26	Manufacture of computer, electronic and optical products	74	Other professional scientific and technical activities
27	Manufacture of electrical equipments	75	Veterinary activities
28	Manufacture of machinery and equipments n.e.c.	77	Rental and leasing activities
29	Manufacture of motor vehicles, trailers and semi trailers	78.	Employment activities
30	Manufacture of other transport equipment	79.	Travel agency, tour operator and other reservation service activities
31	Manufacture of furniture	80	Security and Investigation activities
32	Other Manufacturing	81	Services to building and landscape activities
33	Repair and installation of machinery and equipments	82	Office administrative, office support, and other business support activities
35	Electricity, gas, steam and air conducing supply	84	Public administration and defence, compulsory social security
36	Water collection treatment and supply	85	Education
37	Sewerage	86	Human Health activities
38	Waste Collection treatment and disposal activities Materials recovery	87.	Residential Care activities
39	Remediation activities and other waste management services	88.	Social work activities without accommodation
41	Construction of building	90	Creative, arts and entertainment activities.
42	Civil Engineering	91.	Libraries, archives, Museums and other cultural activities
43	Specialized construction activities	92.	Gambling and betting activities
		93.	Sports activities and amusement and recreation activities
		94.	Activities of membership organization
		95.	Repairs of computers and personal and household goods
		96.	Other personal service activities.

Activities (NIC codes) not covered under MSMED Act, 2006 for registration.

As per the Government of India’s clarification vide notification for SME section the activities in following Table would not be included in the manufacture or production of goods or providing or rendering of services in accordance with provisions of the Micro, Small and Medium Enterprise Development Act 2006.

NIC Code (2 Digit)	Activity
02	Forestry and logging
03	Fishing and aquaculture
45	Wholesale and retail trade and repair of motor vehicle and motorcycles
46	Wholesale trade except of motor vehicles and motor cycles 47
47	Retail Trade Except of Motor Vehicles and motor cycles
97	Activities of households as employees for domestic personnel
98	Undifferentiated goods and services producing activities of private households for own Use
99	Activities of extraterritorial organization and bodies

The NIC 2-digit activity 01- crop, animal production, hunting and related activities would also not be included as per provisions of the Act except for the sub-classes of activities at 5-digit level given in following Table

NIC Code (2 Digit)	Activity
01462	Production of eggs
01463	Operation of poultry hatcheries
01492	Bee- keeping and production of honey and beeswax
01493	Raising of silk worms, production of silk worm cocoons
01612	Operation of agricultural irrigation equipment
01620	Support activities for animal production
01631	Preparation of crops of primary markets i.e. cleaning, trimming, grading disinfecting
01632	Cotton ginning, cleaning and bailing
01633	Preparation of tobacco leaves
01639	Other post-harvest crop activities, n.e.c
01640	Seed processing for propagation