MSME Development Programs — Policy Reforms

Entry	Year	Description	Impact
MSME Definition Revision	2020	The government revised the MSME definition through notification dated June 26, 2020, introducing composite criteria of investment and turnover instead of only investment-based classification. The new definition increased the investment and turnover limits significantly.	The revision brought over 1.25 lakh enterprises under higher categories, expanded the scope of benefits, and aligned the definition with business realities. It addressed the issue of enterprises outgrowing the investment limits while remaining operationally small.
MSMED Act Amendment	2018	The MSMED Act was amended to strengthen the delayed payment provisions and enhance the powers of Micro and Small Enterprises Facilitation Councils. The amendment introduced stricter penalties for delayed payments and simplified dispute resolution mechanisms.	The amendment improved payment discipline among buyers, reduced working capital stress for MSMEs, and strengthened the legal framework for MSME protection. It enhanced the effectiveness of statutory mechanisms for dispute resolution.