MSME stands for Micro, Small and Medium Enterprises. It refers to businesses that are classified based on their size and investment in plant and machinery or equipment. MSMEs play a significant role in the growth and development of the Indian economy, contributing to employment generation, exports, and overall economic development.

The definition of MSMEs was revised in 2020 to provide more significant benefits to businesses falling under this category. Under the revised definition, the following criteria are used to classify businesses as MSMEs:

• Micro Enterprises: Businesses with investment in plant and machinery or equipment up to Rs. 1 crore and turnover up to Rs. 5 crore.

• Small Enterprises: Businesses with investment in plant and machinery or equipment up to Rs. 10 crore and turnover up to Rs. 50 crore.

• Medium Enterprises: Businesses with investment in plant and machinery or equipment up to Rs. 50 crore and turnover up to Rs. 250 crore.

MSMEs are eligible for various incentives and benefits from the government, such as easier access to credit, subsidies, and tax exemptions. The government has launched several schemes and programs to support the growth and development of MSMEs, such as the Prime Minister's Employment Generation Programme (PMEGP), Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), and various other state-specific schemes.

MSMEs also have a significant role in promoting entrepreneurship and innovation in India. They contribute to the development of indigenous technology, products, and services, and play a crucial role in the country's overall economic growth and development.

In summary, MSMEs are businesses that fall under the category of Micro, Small and Medium Enterprises based on their size and investment in plant and machinery or equipment. They contribute significantly to the Indian economy, and the government provides various incentives and benefits to support their growth and development.