The way a society grows and develops is reflected in how it protects its vulnerable. The smallest firms that carry out, very often, critical companies that are the source of most of the country’s primary products are the weakest but the most vital in any industry. These businesses are locally owned and operated, creating jobs that benefit both the people and the economy. Micro, Small, and Medium Enterprises, or MSMEs as they are more commonly called, are a type of business. It’s no surprise that the government wants to support homegrown entrepreneurs by offering incentives to this area.

Also, Read- udyam registration online

From 2006 to 2016, the MSME sector grew at a steady rate of 6.43 percent. This is due in great part to the financial incentives provided by the Indian government under the MSME Act of 2006. These programs vary from no-collateral loans to technical upgrade subsidies, skill development, and entrepreneurship training. All of these programs, however, are only open to MSMEs who are registered with the Ministry of Small Enterprises.

Who is eligible to register as an MSME?

Any type of business entity, including partnerships, LLPs, public and private companies, and sole proprietorships, can register with the Ministry of Micro, Small, and Medium Enterprises as an MSMEs if their investment and turnover limits meet the above-mentioned criteria.

What are the advantages of registering?

MSME’s propel the market forward with minimal investment, while also creating jobs and boosting the economy. Every company begins small, yet appropriate investment is what keeps the wheels turning. All government programs aimed at boosting the MSME sector can only be used if a company is registered with the Ministry. The following are a few of the advantages of registering:

• A Credit System With More Flexibility – Obtaining money is one of the most difficult challenges in launching a business. Small firms don’t have much in the way of collateral to entice banks to lend them money. To that purpose, the government has established the Finance Guarantee Trust Fund Scheme, which provides MSMEs with collateral-free credit to help them run their businesses smoothly and efficiently. The loans are granted based on the viability of the project and the primary security of the assets being financed. The government has also stepped forward to provide subsidies for technological upgradation under the Credit Linked Capital Subsidy Scheme (CLCSS), which provides a 15 percent capital subsidy up to a maximum limit of Rs 15 lakh. This gives MSMEs the competitive advantage they need to compete with multinational corporations.

• Lending with Priority –The RBI has urged banks to set aside cash specifically for the MSME sector, so a registered MSME does not have to suffer too much through the red tape of loan regulations. A registration certificate expedites the process and helps you avoid the headaches that come with taking out credit.

• Initiatives in Training –The government supports small businesses through programs such as the Micro and Small Enterprises – Cluster Development Programme (MSE-CDP), which includes activities such as general awareness, counseling, inspiration, and a trust-building exercise. The government provides opportunities for young entrepreneurs to improve their talents through market development programs such as exports, participation in seminars, workshops, and technological upgradation training. The Ministry organizes training programs to enable people to work for themselves.

• Subsidies for Operational Activities – Many state governments also provide financial assistance to MSMEs in their day-to-day operations. Capital subsidies for plant and machinery, electricity subsidies, stamp duty exemptions on organizational documents, and additional subsidies for MSMEs managed by SC/ST, transgender, differently-abled, and/or women entrepreneurs are among them.

• Pushing Internationally – To promote competitiveness, the government reimburses MSME delegations who go to other countries to investigate new sectors of MSMEs. Participation in international exhibitions, trade fairs, conferences, and seminars by Indian MSMEs is also compensated. The government organizes the programs in order to promote international commerce cooperation. MSMEs that export commodities are also granted exemptions and privileges by the government.

• Procurement by the Government – To offer Indian MSMEs an advantage over their worldwide competitors, the government has set an annual objective of 20% procurement from MSMEs at all levels, including PSUs. This means that they must purchase 20% of their supply from Indian SMEs. The government would provide MSMEs with free tender sets as well as an exemption from paying the earnest money. The cost of doing business will be reduced as a result of this.

• Reimbursement for Intellectual Property Rights – The government has also taken steps to educate and support MSMEs in terms of IPR rights, as well as supporting them in registering their items or processes under specific IP statutes like the Trademark Act, Patent Act, and Geographical Identification of Goods Act. A one-time financial incentive is available for obtaining domestic or foreign patents, as well as GI Act registration. This is done in the form of a refund of application fees up to the scheme’s maximum ceiling.

Suggested Read- print Udyog aadhaar certificate

These are the few advantages that MSME registration provides. To encourage entrepreneurs to register their enterprises, the registration process has been streamlined. Registration gives a legitimized secure environment for a business to thrive, and it is a recommended step for any new or current firm.