Micro, Small, and Medium Enterprises (MSMEs) are the backbone of any economy. They contribute significantly to the employment generation, industrial production, and export earnings of a country. In India, the government has implemented various schemes and initiatives to promote and support the growth of MSMEs in the country. One such initiative is the MSME Registration.
MSME Registration is the process of obtaining a unique identification number for micro, small, and medium-sized enterprises. It is a voluntary registration process that provides various benefits to the registered MSMEs. In this article, we will discuss the benefits of MSME Registration in detail.
- Access to Government Schemes and Benefits
The government of India has launched several schemes and benefits to support the growth of MSMEs in the country. These schemes and benefits include financial assistance, subsidies, tax exemptions, and more. However, to avail of these schemes and benefits, MSMEs need to register themselves with the government. MSME Registration provides a unique identification number, which makes it easier for MSMEs to avail of government schemes and benefits.
For instance, the government launched the Prime Minister’s Employment Generation Programme (PMEGP) to generate employment opportunities in the country. MSMEs that are registered under MSME Registration are eligible to apply for the PMEGP scheme. Similarly, MSMEs that are registered under MSME Registration are also eligible to apply for schemes like Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which provides collateral-free loans to MSMEs.
- Priority in Government Tenders
MSMEs that are registered under MSME Registration are given priority in government tenders. This means that if an MSME has applied for a government tender, and there is another bidder who is not registered under MSME Registration, the preference will be given to the registered MSME. This preference is given to encourage the growth of MSMEs in the country.
- Protection against Delayed Payments
MSMEs often face delayed payments from their buyers, which affects their cash flow and operations. To protect the interest of MSMEs, the government has introduced a provision that makes it mandatory for buyers to make the payment to the MSMEs within 45 days of the receipt of goods or services. In case of a delay, the buyer is liable to pay the interest on the amount due. MSMEs that are registered under MSME Registration can take advantage of this provision and protect themselves against delayed payments.
- Easy Availability of Credit
MSMEs often face difficulties in accessing credit due to their limited creditworthiness. However, MSMEs that are registered under MSME Registration are considered more reliable by banks and financial institutions, and therefore, have better access to credit. Banks and financial institutions prefer lending to registered MSMEs as they are considered creditworthy and have a better track record of repayment.
- Branding and Marketing Support
MSMEs that are registered under MSME Registration are eligible for branding and marketing support from the government. The government provides branding and marketing support to MSMEs to promote their products and services. This support includes assistance in designing logos, creating brochures and flyers, and more. MSMEs can take advantage of this support to enhance their brand image and promote their products and services.
- Concession on Electricity Bills
MSMEs that are registered under MSME Registration are eligible for a concession on their electricity bills. The government provides this concession to reduce the cost of production for MSMEs and encourage their growth.
Conclusion
MSME Registration provides several benefits to the registered MSMEs. It enables them to avail of government schemes and benefits, get priority in government tenders, protect against delayed payments, access credit easily, receive branding and marketing support
