Micro, small, and medium companies, or MSMEs, are the lifeblood of any developing economy. The MSMED Act was created by the Indian government to encourage and promote MSMEs through different subsidies, programs, and incentives. Udyog Aadhar or MSME Registration is required to receive benefits under the MSMED Act from the Central or State Governments, as well as the Banking Sector.
The Indian government has always been supportive of micro, small, and medium-sized businesses (MSMEs). There are numerous benefits to acquiring MSME registration in India, all of which are available only if the company has registered as an MSME/SSI under the MSME Act.
Micro, Small, and Medium Enterprises (MSME) account for more than 90% of India’s total businesses. According to statistics, MSMEs account for roughly 40 percent of overall exports and 30 percent of India’s GDP (Gross Domestic Product). MSMEs are also a key source of employment, employing about 110 million people in the United States1.
The Indian government has been introducing many plans to boost the country’s economy and promote local products in the market, with the goal of giving MSMEs in India a boost.
The government has introduced a number of favorable initiatives to help MSMEs that are properly registered with the Ministry of MSME expand. As a result, registered MSMEs can take advantage of government schemes and get licenses and permits from the appropriate government agencies in a more straightforward manner.
What are the requirements for registering as an MSME?
It is an online process that involves the certification of your Aadhar number. The certificate can be obtained online without the requirement for a physical copy. Furthermore, the process for MSME Certificate holders to get licenses, permits, and registrations from their relevant authorities in any field for their firm is streamlined even further.
As a result, they will be able to provide the Certificate of MSME Registration while submitting an application. Not only that, but applicants can claim reimbursement for ISO Certificate Expenses by submitting an application to the appropriate authority, which is supported by MSME Certificates.
Here are the benefits of MSME Registration-
Loans from a bank (Collateral Free)-
All small and micro-business sectors in India now have access to collateral-free funding from the Indian government. This initiative provides funding to micro and small businesses. Benefits can be claimed by both old and new businesses under this program. The GOI (Government of India), SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, and Medium Enterprises established the Credit Guarantee Trust Fund Scheme to ensure that the Credit Guarantee Scheme is implemented for all Micro, Small, and Medium Enterprises.
Eligibility for Industrial Promotion Subsidies-
MSME-registered businesses are also eligible for a government-suggested subsidy for industrial promotion.
Patent Registration Subsidy-
Enterprises that have received a certificate of registration from MSME are eligible for a generous 50% subsidy. By submitting an application to the appropriate government, this subsidy can be obtained for patent registration.
Exemption from Overdraft Interest Rates-
Businesses or enterprises that are MSME-registered can receive a 1% discount on their Over Draft, according to a system that varies per bank.
Payments Protection (Delayed Payments)-
Buyers of services or products from MSMEs or SSI’s have a habit of delaying payment. The Ministry of Micro, Small, and Medium Enterprises lends a boost to these businesses by allowing them to collect interest on payments that have been delayed by the customer. Conciliation and arbitration must be used to resolve such issues in the shortest amount of time possible.
If an MSME registered business provides goods or services to a buyer, the buyer must pay on or before the agreed-upon payment date, or within 15 days of accepting the goods and services from the MSME or SCI registered business (if there is no mention of the date of payment).
If a buyer delays payment for more than 45 days after accepting the products or services, the buyer will be charged compound interest as well as monthly interest on the agreed-upon sum. The interest rate is three times the Reserve Bank of India’s published rate.
Electricity bills are lower-
This offer is accessible to all MSME Registration Certificate holders who submit an application to the Department of Electricity together with their MSME Registration Certificate.
Reimbursement of ISO Certification Fees-
The expenses for ISO certification can be claimed back by registered MSME businesses.
MSMEs are fast expanding, thanks to government backing and young people who are inspired and daring enough to establish their own business. As a result, understanding the registration procedure and its rewards is critical in boosting the entrepreneurial spirit of MSME and SSI owners.
We hope that this post clarifies any confusion about the advantages of MSME registration in India, as well as those who are considering becoming entrepreneurs or owning a Micro, Small to Medium Scale Business. When it comes to MSME registration online, Business Escalators is the best. They also provide all types of a startup, GST, MSME, legal, and accounting support services. So get in touch with us, and please let us know if we’ve overlooked any perks of MSME registration in India in the comments area.