Micro and small scale industries in India

Micro, small and medium enterprises (MSMEs) are defined in India by investment in plant and machinery (or equipment for services) and annual turnover, with micro the smallest, then small, then medium. They matter out of proportion to their size: they employ very large numbers, use local resources, need little capital per job, spread industry to small towns and rural areas, and supply parts and services to large firms. Worked example: a small auto-component unit with modest machinery employing 30 workers shows the MSME logic — low capital per job, local employment, and a supply link to a large carmaker that could not cheaply make every part itself. Government promotes MSMEs because they deliver employment, balanced regional growth and entrepreneurship together, not just output.