Ok then, you want to know about the business ideas that are called the “Backbone” of India right?
Yes, I know that you are looking for some best MSME business Ideas.
So, do you know the full form of MSME?- It is a Micro, Small, and Medium Enterprises.
In this article, I will inform you about the top 5 MSME business ideas.
This article will help you to set any of the MSME businesses, except for these 5 also.
You will get every detail about the benefit and important details about MSME.
- What is MSME business?
- MSME Redefined.
- The Benefit of MSME Business Registration.
- Economic Relief package for MSME business.
- What type of business comes under MSME?
- Top 5 MSME business ideas.
So, here you can see that you will get all the information’s about MSMEs.
So, read the article carefully to know the top 5 ideas as well as all the other important things that you should know.
What is MSME business?
You can say that this sector is the backbone of India.
The Government of India has introduced MSME in an agreement with MSMED ( Micro, Small, and Medium Enterprises Development ) in 2006.
This MSME sector is helping to grow the Indian Economy heavily.
As a benefit, you can say that it is contributing to exports, extending support to bigger industries by supplying raw materials, basic goods, components, etc.
It is improving the rural area also.
Because of this sector, including India’s GDP the employment has also increased.
It has given employment to many unskilled and semi-skilled people.
According to a report by the Indian Government (2018-2019), there are 6,08,41,245 MSMEs available in India.
For this sector, India’s GDP has grown up by nearly about 8 to 10 percent.
In 2018, MSMEs were redefined by the Micro, Small, and Medium Enterprises Development Amendment Bill, just to classify them based on their annual turnover.
It has two types.
- Manufacturing Enterprises.
- Service Enterprises.
At the very beginning, there was a difference between manufacturing and service MSMEs.
But now, it has been almost removed. So, in the table below, you can find all the information on both sectors.
|Manufacturing Enterprise and Rendering Services.||Investment in plant, machinery, and equipment will not be more than 1 crore rupees.|
And the annual turnover will not be more than 5 crore rupees.
|Investment in plant, machinery, and equipment will not be more than 10 crore rupees.|
And the annual turnover will not be more than 50 crore rupees.
|Investment in plant, machinery, and equipment will not be more than 50 crore rupees.|
And turnover will not be more than 250 crore rupees.
So, you can see the classification of these MSMEs.
The benefits of MSME Registration
If you are registering MSME business then the benefits you will get are-
- Collateral free loans.
This is one of the most interesting and good benefits one MSME can have. Collateral free means- If you are taking a loan, you don’t need to provide anything as a guarantee.
It means if the MSME is unable to repay the loan amount, then the lender has nothing as a guarantee to fulfill the money lent to the MSME.
This is an unsecured loan.
The Credit Guarantee Fund Scheme was launched by the Government of India, to provide this sector collateral-free loans.
The existing and the new enterprises both are covered under this scheme.
To implement this scheme Ministry of MSME, the Government of India, the Small investment and Development Bank of India had established one trust.
And the name of the trust is Credit Guarantee Fund Trust For Micro and Small Enterprises.
2. Eligible for industrial Promotion subsidy Enterprises
The Enterprises that have the MSME registration are eligible for industrial promotion subsidy which has been set by the Government of India.
3. 50 percent subsidy on patent Registration
The Enterprises that have the MSME registration, can get a 50 percent subsidy on patent registration by giving an application to the respective Ministry.
4. 1 percent exemption on the interest rate on overdraft
The MSME register Enterprises can get the benefit of a 1 percent exemption of interest on the overdraft. But it can be changed as per the bank.
5. Protection against delayed payments
The Ministry of Micro, Small, and Medium Enterprises protects the MSME register businesses against the late payment of the buyer.
As well as it will also give the protect the right of interest on delayed payment through conciliation and arbitration.
If an MSME registers Enterprise deals in goods and services then the buyer needs to pay within the time that is discussed and fixed by both.
If there is any date not mentioned in the agreement then, the buyer needs to pay the amount within 15 days.
Except for this, the buyer needs to pay the due within 45 days of any Micro and Small Enterprises.
But if it happens then the buyer has to pay interest on that which is far away from the normal bank’s rate.
6. Reimbursement of ISO certification charges
The Enterprises that have the MSME registration certificate those Enterprises can give an application to the respective authority and can claim for the reimbursement of ISO certification expenses.
The ISO certifies that the Enterprise has a management system, manufacturing process, service, or documentation procedure that has all the requirements for standardization and quality assurance.
7. Concession in electricity bills
The MSME register Enterprises get a concession in electricity bill also.
For this, the Enterprises needs to submit the MSME certificate with a proper application.
8. Market assistance from the Government and export promotion
The Government of India often organized trade-related programs, exhibitions, etc internationally.
The Enterprises that has the MSME registration got the chance to participate in these type of programs also.
By that, the Enterprises can build relations with many countries within their trade.
The Government of India also gives incentives for exporting goods and services. Like-
The subsidy, tax exemption, technical support, etc.
9. Technology and quality up-gradation support to MSMEs
To increase the cost-effectiveness and to promote clean energy use in manufacturing the Government refunds on the project cost that related to in goals.
And the Government also gives the support of cleaning technology implementation, audit report preparation, etc.
Economic Relief Package for MSME business
This is like-
- The MSMEs will get the collateral-free automatic loan up to 3 lakh crore. And the tenure will be 4 years.
According to Finance Ministry- by this scheme, approx 45 lakh MSME units will be able to continue their business in this CORONA pandemic.
As well as they have decided that- The Government procurement tenders up to Rs 200 crore will no longer be open to global tenders or players.
According to the Finance Ministry, to activate this scheme/provision some necessary things can be changed in general finance rules.
As well to arrange trade affairs after this COVID pandemic will be difficult. That is why an E-linked market is going to be provided.
What type of business comes under MSME?
As I discussed before that it has two units. One is the Manufacturing unit and the other one is the Service unit.
But all the manufacturer does not come under this section.
The Government has divided this into three sectors. Every sector has its criteria ( That you can check in the MSME redefined section as a table ).
So, here are some business types that come under this-
- Packed Food. ( Chips, Bread, etc.)
- Fruit and Vegetables.
- Grocery Shop.
- Milk parlor. ( Dairy )
- Poultry Farm.
- Mill. ( Like- Flour Mill )
These are some sectors that come under MSMEs. But these are just some examples.
I have given you a number that in India there are almost 6,08,41,245 MSMEs available.
Top 5 MSME business ideas in 2021
As it is the backbone of India and you will get a huge benefit from the Government of India, that is why I can say that if you set up a good demandable business then it will be a huge earning option for you.
I think you have read the benefits you will get if you have an MSME registration certificate.
So, the top 5 ideas will be-
- Poultry Farm.
If you have that space or location then you can think over it.
2. Paper Manufacturing Business.
3. Biodegradable Plates Manufacturing Business.
4. Gym Equipment Manufacturing Business.
5. Organic Farming or Flour Mill.
These ideas can be the best idea if you work properly and with a strategy on them.
- Best Business Ideas for Students.
- Best Manufacturing Business Ideas.
- Wholesale Business Ideas.
- Low-budget business ideas in India.
What is a good business to start in 2021?
Many good business ideas are in the market that can be started in 2021. And if you have a proper strategy then you will be successful
These are like-
1. Virtual Assistant.
3. Affiliate MARKETING.
4. Web Developing.
What is the best business for beginners?
If you are a beginner and you don’t have money then you can start these businesses for free or with a very low investment. These are-
2. Graphic Designer.
3. Animation Artist.
4. 3D artist.