A Rajya Sabha Standing Committee on Industry has renewed its push for a separate 'nano' category for India's smallest businesses, rejecting the micro, small and medium enterprises (MSME) ministry's concerns about administrative complexity. According to reports from Mint, the committee, chaired by lawmaker Tiruchi Siva, first proposed the nano classification in March 2025 in a report on the MSME ministry's budgetary grants. The committee has now directed the ministry to form a group involving Small Industries Development Bank of India (SIDBI), Reserve Bank of India (RBI), state governments and experts on informal enterprises to work on the new nano-business classification.
The committee recommends the lowest financial criteria around ₹10 lakh for the new nano category, as reported by Mint. This would ensure that businesses with a turnover above ₹2.5 crore do not deviate from the core purpose of MSMEs—driving employment generation and supporting smaller enterprises. The committee notes that 99.3% of India's 92 million MSMEs are micro enterprises, with turnover below ₹10 crore, making the existing micro category too broad to distinguish between subsistence-level household businesses and larger micro enterprises.
The MSME ministry has expressed significant concerns about the proposal, according to Mint reports. The ministry stated that a new category would require new legal definitions, policy changes and an overhaul of existing administrative mechanisms. It highlighted that it would be difficult to establish a clear and stable criteria for nano enterprises w.r.t. turnover, as nano-businesses fluctuate frequently in scale, making classification complex. The ministry also warned that adding 'nano enterprises' may create duplication across ministries and schemes instead of simplifying governance.
The committee cited Kerala's 2021 nano enterprise classification as a successful example, as reported by Mint. The state government recognised nano enterprises as a distinct segment for units with investment up to ₹10 lakh and introduced targeted schemes including interest subvention, margin money assistance, and household enterprise promotion. The policy provided 6% interest subvention for three years, rising to 8% for women and SC/ST enterprises, demonstrating practical implementation of the nano category concept.
According to Veeramani C, professor and director at the Centre for Development Studies, the rationale behind the nano enterprise category appears focused on supporting self-help groups and small home businesses. As reported by Mint, he noted that many people remain self-employed due to lack of decent wage income, making policy focus on this segment necessary for basic livelihood generation. However, he emphasized that administrative difficulties are valid concerns, suggesting that local government should be the best channel for supporting these businesses with adequate caution for 'elite capture' and differentiated policy support according to business needs.
