The Federation of Coimbatore Industrial Associations has appealed to the Union Government to include a separate category called ‘cottage industries’ in the revised MSME (Micro, Small and Medium-scale Enterprises) definition and to restrict the new definition to the manufacturing sector.
The Federation, representing 19 industrial associations here, said in a press release that the revised definition brought together micro units of less than ₹ 1 crore turnover and a medium-scale enterprise of nearly ₹ 250 crore turnover under the same category.
Orders from PSUs
Currently, Public Sector enterprises (PSUs) should procure 25 % of their store requirement from MSMEs. With the new definition, micro units need to compete with medium-scale enterprises to get the orders from PSUs.
According to data available, 95 % of the MSMEs in the country were in the micro category. Further, manufacturing and trading companies were now on the same platform.
The Federation said the government should introduce a clause ‘an enterprise engaged in manufacturing or production of goods, pertaining to any industry and by employing plant and machinery in the process of value addition’ so that only the manufacturing units come under the MSME sector.
Separate category
For industries with less than ₹ 25 lakh investment and not more than ₹ 1 crore turnover, there should be a separate category called cottage units. And the cottage and micro units should get 50 % of the PSU procurement orders.
