On October 02, 2006, the Government of India brought into
effect, the Micro, Small and Medium Enterprises Development Act,
2006 ("Act") for facilitating the
promotion, development and enhancing the competitiveness of micro
small and medium enterprises. Through Section 7 of the Act, the
criteria of micro, small and medium enterprises was defined.
Section 7 stipulated that enterprises engaged in the manufacture or
production of goods or enterprises engaged in providing or
rendering services, would require an investment up to a certain
amount which would define whether that enterprise would be
recognized as a micro, small or a medium enterprise
("MSME").
Micro Enterprises
An enterprise engaged in the manufacture or production of goods
would only be recognized as a micro enterprise if the investment in
plant and machinery would not exceed more than Rs. 25
lakhs1. Whereas if the enterprise was engaged in
providing or rendering services, then it would require
