World Msme Forum Demands Separate Policy Framework For Enterprises Below ₹5 Crore Turnover
Aug29,2026
| Jagrati Lahar Bureau | Ludhiana
Says 99.95% of enterprises have turnover below ₹3 crore, while MSME
definition extends up to ₹500 crore
Ludhiana, August 29: The World MSME Forum has urged Prime Minister Narendra
Modi to immediately review India's present MSME definition and create a separate Ministry,
Department or dedicated policy framework for grassroots enterprises having an annual
turnover below ₹5 crore.
World MSME Forum President Baadish Jindal said that the present MSME definition has
become excessively broad and fails to reflect the economic reality of the overwhelming
majority of India's enterprises.
Citing ASUSE 2025 data, the Forum pointed out that 81.61% of MSMEs have turnover
below ₹10 lakh, 93.79% below ₹25 lakh, 97.39% below ₹50 lakh, 98.94% below ₹1 crore
and an astonishing 99.95% below ₹3 crore. In sharp contrast, under the present
classification, a medium enterprise can have a turnover of up to ₹500 crore.
Jindal said, “The question before the Government is simple: Can a small enterprise with
a turnover of ₹5 lakh or ₹10 lakh be expected to compete for policy attention, financial
support and Government incentives with an enterprise having a turnover of ₹500 crore
merely because both fall under the same MSME umbrella?”
The Forum also expressed serious concern over the condition of India's manufacturing
MSMEs. According to the data cited, the average gross value output of a manufacturing
enterprise has declined from ₹6.24 lakh to ₹5.33 lakh, while the share of employment-
generating manufacturing MSMEs has declined from 11.73% to 10.99%.
At the same time, manufacturing MSMEs grew by only 3.60%, compared with growth of
6.93% in trading and 7.40% in services, indicating that India's MSME ecosystem is
increasingly shifting away from manufacturing.
The data further reveals that the average fixed assets of a manufacturing MSME are only
around ₹2.19 lakh, while only 16.5% of manufacturing MSMEs are registered under any
department.
The Forum said that despite the Government increasing institutional credit limits, the average
loan size of grassroots enterprises has actually declined from ₹25,471 to ₹23,062, proving
that the financial requirements and realities of India's smallest enterprises are completely
different from those of large companies included under the broad MSME definition.
The World MSME Forum has therefore proposed a separate “Grassroots Enterprise”
category for businesses with turnover below ₹5 crore, with simplified procedures for GST,
taxation, labour compliance, environmental permissions, bank documentation, Government
procurement and statutory reporting.
It has also demanded a dedicated small-ticket credit mechanism and special policy support
for small manufacturing units, household and family enterprises, artisans, rural industries,
women-led enterprises, first-generation entrepreneurs and informal businesses seeking
formalisation.
“India does not merely need more MSME registrations; India needs stronger MSMEs.
The real objective of Government policy should be to help enterprises grow from ₹5
lakh to ₹25 lakh, ₹1 crore, ₹5 crore, ₹25 crore and eventually become globally
competitive companies,” Jindal said.
The Forum has also demanded the constitution of a high-level expert committee comprising
representatives of the Ministry of MSME, Ministry of Finance, DPIIT, RBI, SIDBI,
NITI Aayog, industry associations, economists and grassroots entrepreneurs to
comprehensively review India's MSME classification and policy architecture.
The World MSME Forum has appealed to Prime Minister Narendra Modi to consider this
reform on priority.
“Our average enterprise is extremely small, while our legal definition has become
extremely large. India now needs precision, targeted support and a graduation-based
MSME policy. A ₹5 lakh enterprise should not have to compete for Government policy
attention with a ₹500 crore enterprise,” Baadish Jindal added.
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