Days after changing the definition of MSMEs, the government has decided to further revise the criteria for medium-sized units by enhancing the investment and turnover limits to up to ₹50 crore and ₹200 crore respectively, Union Minister Nitin Gadkari said on Tuesday.
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 an investment of up to ₹1 crore and turnover under ₹5 crore will be classified as ‘micro.’
A company with an investment of up to ₹10 crore and a turnover of up to ₹50 crore will be classified as ‘small’ and a firm with an investment of up to ₹20 crore and a turnover under ₹100 crore will be classified as ‘medium.’
The previous criteria for classifying enterprises in the ‘medium’ category was an investment of up to ₹10 crore and a turnover of up to ₹50 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,” Mr. Gadkari said.
The Minister for MSMEs and Road Transport and Highways said he felt the criteria should be based on investment ‘or’ turnover instead of investment ‘and’ turnover as announced, adding that the government ‘will rectify the same.’
Raising limit to ₹250 cr.
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.
Mr. Gadkari said the government planned to raise MSMEs’ contribution to India’s exports to 60% from the 48% at present and also boost the sector’s contribution to the country’s GDP from 29% currently to 50%.
“We are planning to create five 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 them to take advantage of the ‘blessing in disguise’ posed by the global ‘hatred against China’ through cost reduction and encouraging import substitution.
Besides, Mr. Gadkari said the government wanted to make bus ports and was also planning to build logistics parks.