Exercises · Q2
Q.Distinguish between a micro enterprise, a small enterprise and a medium enterprise on the basis of their characteristics.
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✓ Free question
The three MSME classes can be compared on several characteristics:
| Basis | Micro enterprise | Small enterprise | Medium enterprise |
|---|---|---|---|
| Investment & turnover | Lowest (≤ ₹2.5 cr investment, ≤ ₹10 cr turnover) | Moderate (≤ ₹25 cr, ≤ ₹100 cr) | Large (≤ ₹125 cr, ≤ ₹500 cr) |
| Capital used | Very small | Moderate | Substantial |
| Technology | Simple, mostly manual/semi-mechanised | Mix of manual work and machines | Considerable machinery and technology |
| Labour vs capital | Highly labour-intensive | Labour-intensive with some machines | More capital-intensive |
| Ownership | Single owner or family | Individual, partnership or small company | Company/partnership with departments |
| Management | Owner handles most tasks | Simple hierarchy begins | Professional/semi-professional management |
| Scale & market | Small; local market | Larger; local and regional markets | Larger scale; regional or national, may export |
Example. A home bakery is a micro unit; a small garment-manufacturing workshop is a small unit; a mid-sized food-processing company is a medium unit.
✓Final answer
Micro enterprises are the smallest — least capital, simple technology, owner-run, local market. Small enterprises are larger — moderate capital, some machinery, a simple hierarchy, regional markets. Medium enterprises are bigger still — substantial capital, more technology, professional management and regional-to-national markets. Across the three, investment, machinery, scale and market size rise while labour-intensity per rupee falls.
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