MSME norms to be revised
Days after changing the definition of MSMEs, the government has decided to further revise the criterion for medium units by enhancing the investment and turnover limits to up to Rs 50 crore and Rs 200 crore, respectively, Union minister Nitin Gadkari said on Tuesday.
Finance minister Nirmala Sitharaman had last week announced a change in the definition of micro, small and medium enterprises (MSMEs), while giving details of the government package to fight the coronavirus.
Any firm with investment up to Rs 1 crore and turnover under Rs 5 crore will now be classified as “micro”.
A company with investment up to Rs 10 crore and turnover up to Rs 50 crore will be classified as “small” and a firm with investment up to Rs 20 crore and turnover under Rs 100 crore will now be classified as “medium”.
The previous criterion for classifying enterprises in the “medium” category was investment up to Rs 10 crore and turnover of up to Rs 5 crore.
“We have taken a decision to raise the up-to-Rs 20 crore investment (criteria) to up-to- 50 crore and turnover (limit) to up-to-Rs 200 crore. So we will issue an order for that,” Gadkari said.
The minister for MSME and road transport and highways said he feels the criterion should be based on investment “or” turnover instead of investment and turnover both as announced, adding that the Centre “will rectify the same”.
Gadkari was also open to considering suggestions regarding enhancing the turnover limit to up to Rs 250 crore for medium enterprises, and will take up the matter with the MSME secretary.
The government plans to raise MSMEs’ contribution to exports to 60 per cent from 48 per cent and boost the sector’s contribution to GDP to 50 per cent from 29 per cent.
“We are planning to create 5 crore new jobs. Until now, we have created 11 crore jobs,” said the minister, adding that he was keen on developing Indian MSMEs of international standards.
Interacting with representatives from an exporters’ body, he urged exporters to take advantage of the “blessing in disguise” posed by the global “hatred against China” through cost reduction and encouraging import substitution. Besides, Gadkari said the government wants to make bus ports and is also planning to build logistics parks.