Days after changing the definition of Micro, Small and Medium Enterprises (MSMEs), the central government has decided to further revise the criteria for medium units by enhancing the investment and turnover limits to up to ₹50 crore and ₹200 crore respectively, Union Minister for MSMEs Nitin Gadkari said on Tuesday (May 19).
Finance Minister Nirmala Sitharaman had last week announced a change in the definition of MSMEs.
As per the revised definition, any firm with investment up to ₹1 crore and turnover under ₹5 crore will be classified as “micro”. A company with investment up to ₹10 crore and turnover up to ₹50 crore will be classified as “small” and a firm with investment up to ₹20 crore and turnover under ₹100 crore will be classified as “medium”.
The previous criteria for classifying enterprises in the “medium” category was investment up to ₹10 crore and turnover of up to ₹5 crore.
“We have taken a decision to raise the up to ₹20 crore investment (criteria) to up to ₹50 crore and turnover (limit) to up to ₹200 crore. So we will issue an order for that,” Gadkari said.
Gadkari, Union minister for MSMEs as well as Road Transport and Highways, said he feels the criteria should be based on investment “or” turnover instead of investment and turnover both as announced, adding that the government “will rectify the same”.
The minister said he was also open to considering suggestions regarding enhancing the turnover limit to up to ₹250 crore for medium enterprises, and will take up the matter with the MSME secretary.
Gadkari said the government plans to raise MSMEs’ contribution to India’s exports to 60 per cent from 48 per cent at present and also boost the sector’s contribution to the country’s GDP from 29 per cent currently to 50 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 exporter’s 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.
The various measures introduced to help out MSMEs, including changing its definition, were part of an economic stimulus package announced to help with the revival of the economy, which had been witnessing a slump due to the lockdown enforced to curb the spread of COVID-19.
The stimulus package was estimated to be worth ₹20 lakh crore, details about which were announced by Finance Minister Nirmala Sitharaman in a series of media briefings last week.
(With inputs from agencies)