What is the New Definition of MSMEs ?
- As per the new definition, the distinction between manufacturing and services enterprises has been eliminated. The investment size criteria for each category – micro, small and medium – has been hiked to bring more companies under the definition of MSME. Additional criteria of turnover has been included to the definition of MSMEs.
- “Low threshold in MSME definition have created a fear among MSMEs of graduating out of the benefits and hence killing the urge to grow,”
- A Micro Enterprise was defined as a unit where the annual turnover does not exceed Rs 5 crore.
- A Small Enterprise would have turnover of more than Rs 5 crore but not exceeding Rs 75 crore.
- A Medium Enterprise was defined as a unit where the annual turnover is more than Rs 75 crore but not exceeding Rs 250 crore.
- “The previous proposed definition would allow traders to benefit, without any investment in plant and machinery. However, the government has now reached a middle ground”.
- As of now, there are more than 60 lac registered MSMEs.
- The government is expected to link the MSMEs with the filing of GST to avail benefits under schemes like the interest subvention scheme.
- The interest subvention scheme is only applicable to GST registered units and firms with Udyod Aadhaar number. GST registration is a more stringent process and has relatively more authenticated information.
- With the definition requiring turnover, firms would need to register on GST thereby making them eligible for the scheme.
About MSME-
- The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India.
- Minister of MSMEs – Nitin Gadkari
- Minister of State – Pratap Chandra Sarangi
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