MSME Reforms: A Big Boost for Small Businesses

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Bikky Khosla | 27 Mar, 2025

The long awaited revision in MSME classification is finally here - better late than never. In my opinion, the government’s decision to revise MSME classification limits is a landmark move that will provide a significant boost to small businesses of the country. Having seen the struggles of MSMEs closely, over the years, I feel this change is both timely and necessary.

For your knowledge, I'm giving the increased thresholds for your ready reckoning.

For micro-enterprises the Investment limit has been raised from ₹1 crore to ₹2.5 crore, and the turnover from ₹5 crore to ₹10 crore.

Meanwhile for small enterprises, the investment cap has been increased from ₹10 crore to ₹25 crore, with the turnover cap increased from ₹50 crore to ₹100 crore.

In addition, for medium enterprises, the investment threshold has been increased from ₹50 crore to ₹125 crore, while the turnover has been increased from ₹250 crore to ₹500 crore.

I believe that there will be no arguing when I say that these changes will now allow more businesses to qualify as MSMEs, ensuring continued access to government benefits without prematurely losing classification advantages.

Why I strongly believe that these new classifications matter is because on many occasions innumerable MSMEs outgrow their category and lose key benefits like easier credit, lower interest rates, and government incentives. By increasing the limits, businesses can now scale without immediate risk.

As such, a large number of businesses will now be eligible for collateral-free loans and financial support, easing operational struggles.

This move particularly benefits manufacturing and export-oriented businesses, which often require high capital investments. With the new thresholds, they can expand operations, invest in technology, and remain competitive while retaining MSME benefits.

In my view, this policy change will be a game-changer for MSMEs, reducing their barriers to growth, encouraging investment, and ensuring that businesses can scale without fear. With the right support and execution, this move has the potential to strengthen India’s small business landscape, making it more resilient and competitive on a global scale.