India is on a mission where it wants to become the next major manufacturing hub after China globally. For India to beat China, the Indian Government has to take steps that are going to boost investment in the country and drive growth. To maintain growth levels, the government has to provide every business loan easily as well as make business loan eligibility criteria more lenient. This is why the MSME and Udyog Aadhar schemes were introduced.
What is MSME?
MSME stands for micro, small, and medium enterprises. These industries form the backbone of the Indian economy. The MSME industries are categorized based on their investment in plant and machinery for a manufacturing company and equipment for a service company. This sector employs numerous people in India. Thus, to enable their growth, the government focuses on providing them with SME loan benefits. However, to avail of the benefits, you must be registered under MSME.
Benefits Of MSME Registration
If you get registered under the MSME scheme, there are many benefits that you can get for your firm. Following are the benefits from MSME registration:
- Business loan interest rates are available at lower rates for registered industries
- Industries get many tax rebate options
- Easy to get government licenses and certifications
- Exclusive access to Government tenders for MSME industries only
Why MSME Registration?
MSME registration is not compulsory, but the advantages that it brings make it lucrative to do. It opens new doors and opportunities for industries to grow and also gain from it.
What is Udyog Aadhar?
This is also an initiative by the Indian government to promote, especially, the SME sector. This scheme is mainly targeted towards the smaller business owners who have less capital to operate. Under this scheme, the owner, or proprietor of the business has to provide his 12-digit Aadhar number and get registered. Just like the Aadhar, it is an identification system, but specifically for businesses.
Benefits of Udyog Aadhar
- The benefits of getting registered under the Udyog Aadhar scheme are:
- Easy access to any business loan and subsidized business loan rates
- Exclusive access to government subsidies
- Apply for SME loans and other government schemes
- If you are participating in foreign expos, then financial aid is provided for the same
- Exemption for excise and indirect taxes
- Get trademark and patents at lower interest rates
- Concession on electricity bills
Who Can Get Registered Under This Scheme?
Any type of business can get registered under this scheme. It could be a HUF firm, partnership firm, sole proprietorship, Limited company, private limited company, or any other. The registration is free and an online process. The only criteria are to make sure the company falls under the MSME category.
Which Scheme to Opt For?
The Indian government has taken various steps to boost the MSME sector that comprises over 95% of industries in the country. Together, it is responsible for almost 45% of the entire output of the country. Both these schemes are going to be helpful to grow these industries in the future. A company should get registered under both the schemes as it provides different benefits which can help grow faster. The incentives are worth get registered.
On a Final Note
It is very important to provide adequate capital to industries so they can keep growing. For a developing country like India, it becomes even more important. Apart from the government schemes, there are other ways also to get loans through private companies. Companies can get all kinds of business loans and pay them off at their convenience using the business loan EMI calculator. For more information, please visit Tata Capital’s website.