Gadkari for Further Doubling of MSME Recognition Criteria to 50 crs Invest and 200 crs Turnover
Days after changing the definition of MSMEs, the 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 Nitin Gadkari said on Tuesday, 19 May 2020.
Unveiling the contours of the ₹20 lakh crore stimulus package, Finance Minister Nirmala Sitharaman had last last week announced a change in the definition of micro, small and medium enterprises (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.
The MSME and Road Transport and Highways Minister said that 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”.
He also added that 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.
Boosting Indian MSMEs
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 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.