Introduction
Finance Minister Nirmala Sitaraman has announced in Press conference that government has decided to make changes in definition of MSMEs (Micro, Small and Medium Enterprises) and these change will be welcome by industry. According to FM, favorable changes has been decided which will cover more manufacturers and services provider in new definition of MSME. Lets discuss existing and proposed definition of MSME.
Existing Definition of MSME
Manufacturer
- Micro Manufacturer Enterprises are those enterprises who have invested less than Rs. 25 lakhs in plant and machinery.
- Small Manufacturer Enterprises are those enterprises who have invested Rs. 25 lakhs and more but less than Rs. 5 crore in plant and machinery.
- Medium Manufacturer Enterprises are those enterprises who have invested Rs. 5 crore and more but less than Rs. 10 crore in plant and machinery.
Service Provider
- Micro Service Provider are those enterprises who have invested less than Rs. 10 lakhs in plant and machinery.
- Small Service Provider are those enterprises who have invested Rs. 10 lakhs and more but less than Rs. 2 crore in plant and machinery.
- Medium Service Provider are those enterprises who have invested Rs. 2 crore and more but less than Rs. 5 crore in plant and machinery.
Proposed Definition of MSME
Manufacturing and Servicing Enterprises
- Micro Enterprises are those enterprises who have invested less than Rs. 1 Crore in plant and machinery and having turnover less then Rs. 5 crore.
- Small Enterprises are those enterprises who have invested Rs. 1 Crore and more but less than 10 Crore in plant and machinery and having turnover of Rs. 5 crore and more but less then Rs. 50 Crore.
- Medium Enterprises are those enterprises who have invested Rs. 10 Crore and more but less than 20 Crore in plant and machinery and having turnover of Rs. 50 crore and more but less then Rs. 100 Crore.
Announcement has been made and these proposed definition will be applicable from the date of notification and required changes will be made in act.
