The classification of Micro, Small and Medium enterprises is based on which of the following factors ?
1. Annual turnover
2. Number of workers
3. Investment in plant and machinery or equipment
Select the answer using the codes given below :

Correct option is D

The classification of Micro, Small and Medium Enterprises (MSMEs) in India is governed by the MSME Development Act, 2006.  Under the current definition, MSMEs are classified only on the basis of:

• Investment in plant and machinery or equipment, and

• Annual turnover.

The criterion of number of workers is not used for MSME classification in India.

Revised classification criteria effective from 1 April 2025 notified by the Government of India:

• Micro Enterprise: Investment ≤ ₹ 2.5 crore and Turnover ≤ ₹ 10 crore

• Small Enterprise: Investment ≤ ₹ 25 crore and Turnover ≤ ₹ 100 crore

• Medium Enterprise: Investment ≤ ₹ 125 crore and Turnover ≤ ₹ 500 crore