Today, the cabinet has passed a new law, which classifies the medium-sized companies funded by their annual revenue rather than expenditure. The revised basis for the definition of small and medium-sized businesses based on turnover has made it easier for both the government and the industry to consider the company as an MSME.

The branch of the Government of India includes the Ministry of micro, small and medium enterprises. The MSME is the Chief Executive Officer for the Administration and Formulation of Legislation, Regulations and Various Laws on Micro, Small and Medium Enterprises in India.The relevant criterion of the definition of MSMEs is predicated on the MSMED Act. It was initially different for manufacturing and services units. In terms of monetary constraints, it was also very poor.

A company can be classified on the basis of various criteria. Such as a company where the investment in plant and machinery or equipment does not go above one crore rupees and turnover does not go above five crore rupees are called micro enterprises. 

A firm where the investment in plant and machinery or equipment does not go above ten crore rupees and the turnover does not exceed fifty crore rupees are called small enterprises. Whereas, a company where the investment in plant and machinery or equipment does not go above fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees are classified as medium enterprises.

The Government of India has approved the new definition of MSME that is, Micro Small and Medium Enterprises to boost the growth of small companies. 

The Government has also approved the revised new definition of the MSME. The MSMEs have been redefined on the basis of investment limit as well as their turnover size. The Atmanirbhar Bharat Abhiyaan involves great reforms to boost the businesses with the major focus on the micro, small and medium Enterprises (MSME) sector.

Recently, under Atma Nirbhar Bharat Abhiyan (ABA), the Ministry of Micro, Small and Medium Enterprises, under the Atma Nirbhar Bharat Abhiyan (ABA), has revised the MSME classification by inserting a composite criterion for both investment in plant and machinery and annual turnover of enterprises. Also, now there is no distinction between the manufacturing and the services sectors under erstwhile MSME definition. This removal will create parity between the sectors.

To revive the MSME sector, there are a total of 6 reforms according to the rules of the Government on Atma Nirbhar Bharat Abhiyaan. These include Rs 3 lakh crores collateral free automatic loans, Rs 20,000 crores subordinate debt for MSMEs and Rs 50,000 crore equity infusion through MSME fund of funds.