Laghu Udyog Bharati, a national association of micro and small industries has opposed the move by the Union Government to amend the definition for micro, small, and medium scale enterprises (MSMEs) based on turn over.
Reasons for opposition:
If the Indian Government makes changes in the definition, which is intended to be based on the turnover of a specific unit, many micro or medium-scale units can be categorized as a small-scale unit and larger businesses will come below the medium category. This will drive to greater competition for micro and small-scale units. Accordingly, the handholding and privileges continued by the Government will serve the larger and medium-scale units preferably than the micro and small-scale ones, ‘Besides, he said that the government should develop the investment limit and the analysis should not depend on the turnover of every system. Retaliate
Plea for the growth in Capital Investment:
According to the media reports, the Indian Government is trying to demolish the difference between manufacturing and service sectors through this major initiative of changing the definition of MSMEs in terms of turn over. The state President Surulivel urges that capital investment limits can be stretched to 50 lakhs for Micro units and 10 crores to small industrial units for better growth of the MSME sector.
Highlights of New Proposal:
As per the plan, any system with a turnover of up to Rs 5 crore will be categorized as a micro-enterprise, while those with up to Rs 75 crore yearly incomes will be in the small category section. Thus, enterprises with a turnover of up to Rs 250 crore will be named as medium-scale enterprises. Beginning of this month, Union Minister for MSME, Nitin Gadkari had announced that the government will shortly change the definition of MSMEs. The new definition is expected to be pretended via an amendment to the MSME Act and can drive to more growth in India’s expertise in doing business plots.