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New Delhi: From July, more than six crore micro, small and medium enterprises (MSMEs) across the country will be classified on the basis of new norms approved by the government.
As per the revised norms, the unit with investment of Rs 50 crore and turnover of Rs 250 crore will fall under the ‘medium’ enterprise category.
In addition, a manufacturing and services unit with an investment of Rs 1 crore and a turnover of Rs 5 crore will be classified as ‘micro’, while a unit with an investment of Rs 10 crore and a turnover of Rs 50 crore will be ‘small’. Will be classified as an enterprise. .
Also, a new overall formula for classification for manufacturing and service units has been notified. Now, there will be no difference between manufacturing and service sectors.
Ministry officials said that the new definition would pave the way for the strengthening and growth of MSMEs. In particular, the provision to exclude exports from the count of turnover would encourage MSMEs to export more and more so that no one would benefit. MSME Unit.
“It is expected that the country is expected to add to the rapid growth in exports and more development and economic activity and creation of jobs,” an official statement said.
The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi on Monday approved the upward revision of the definition of Micro, Small and Medium Enterprises (MSME).
“The Union Ministry of Micro, Small and Medium Enterprises has issued a gazette notification to pave the way for the implementation of the upward revision in the definition and norms of MSMEs in the country. The new definition and norms will come into effect from July 1, 2020.” The statement said.
The current criteria for definition of MSMEs are based on the MSMED Act, 2006.
This was different for manufacturing and service units. This was also very low in terms of financial limitations.
Since then, the economy has undergone significant changes. Following the package announced on May 13, 2020, many representations were asserting that the announced amendment was still not in line with market and price conditions and should therefore be further revised.
The statement said, “Keeping these representations in mind, the Prime Minister decided to further increase the range of medium units. This would be realistic over time and establish an objective system of classification and ease of doing business.” Has been done for. ” .
MSMEs account for 29 percent of India’s GDP and comprise about half of its exports. These units employ more than 11 million employees.
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