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New MSME Bill proposes enhanced limit for investment
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SME Times News Bureau | 22 Dec, 2015
The Ministry of Micro, Small and Medium Enterprises (MSME) has proposed the new investment limits for MSMEs under New MSME Amendment Bill 2015, informed the Minister of State, MSMEs, Giriraj Singh in a written reply to a question in Lok Sabha on Monday.
He said, the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2015 are to (i) enhance the existing limit for investment in plant and machinery considering changes in price index and cost of inputs consistent with the emerging role of the MSMEs in various Global Value Chains, (ii) include medium enterprises apart from small enterprises in section 7(9) to enable the aforesaid category of enterprises to avail the benefits and become competitive, and (iii) empower the Central Government to revise the existing limit for investment, by notification, considering the inflation and dynamic market situation.
As per Micro, Small and Medium Enterprises Development (Amendment) Bill, 2015, the investment limit prescribed for Micro, Small and Medium Enterprises (MSMEs) in the country, is proposed as under:
Manufacturing enterprises:
- Micro enterprise: Investment in plant and machinery does not exceed Rs. 50 lakh
- Small enterprise: Investment in plant and machinery is more than Rs. 50 lakh but does not exceed Rs. 10 crore
- Medium enterprise: Investment in plant and machinery is more than Rs 10 crore but does not exceed Rs 30 crore
Service enterprises:
- Micro enterprise: Investment in equipments does not exceed Rs. 20 lakh
- Small enterprise: Investment in equipments is more than Rs. 20 lakh but does not exceed Rs. 5 crore
- Medium enterprise: Investment in equipments is more than Rs. 5 crore but does not exceed Rs. 15 crore
As provided under Section 7(9) of the MSMED Act, 2006, the Government, while classifying any class or classes of enterprises under sub-section 7(1) of this Act, may adopt any criteria e.g. investment, employment or turnover of the enterprises and include in such classification the micro or tiny enterprises or the village enterprises, as part of small enterprises, added minister.
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MSME sector
Srivathsan | Wed Dec 23 01:36:38 2015
The present banking system who are bent upon collateral security( CGTSME scheme) is only an ey wash. Seoerate financial system especially for working capital must be initiated with experienced entrepreneurs, market professionals ( exclude lawyers, chartered accountants,bankers etc.) these people ( panel must from Industries who have preexistence and understanding industry environment. The gov Babus must facilitate production and Not go through only harassment and litigation process.You will find sea change in productivity.Each NPA should be asnalysed by the panel and find ways to run the industry than take action for Closer of industry by attaching his property. This procedure is colonial and money lender attitude. Gov looses huge revenue by closing industry.The NPA in MSME must be brought to less than 0.1% and this is for bettering revenue to govt. One single sickness does not mean execution of the person.
MSME sector
Srivathsasn | Wed Dec 23 01:26:19 2015
All the lending instituion must proactivly work for functiolning of Micro industries as they are veery vulnerable to financial shocks and so verfy low financial base and lack of experience in field of mangaing an industry, and no external suport for them since they are very smasll. Lending institution must not act a money lender but the active partner in promoting engorgement revenue not by harassment but by hand holding the entrenchment to run the industry smoothly and guide for corrective action when necessary. They should not be just money lenders but facilitate of production . They can have a separate group of experience entrepreneurs under their panel; just like they have legal panel who only work towards recovery and not felicitate productivity.The biggest beneficiary of a healthy micro industry is government , it is neither bank or the entrepreneur. When as micro industry runs at an estimated turnover of 1 crore, Governemnt gets a minimum of 20% on various taxes ie 20 lakhs, and banker just gets 3 lakhs as interest out of which his expense is 2 lakhs or more leaving just one lakh for taking risk, and Entrepreneur may get 3 lakh as net net take home( equivalent of a salary of class IV employee in gov sector for all the work he does with sword hanging on his head. Please ponder over this situation for a person who generates employment, takes risk.Let us think the Indian way to support our own people
MSME Limit
J.Diwakar. CEO Anil Enterprises | Tue Dec 22 21:24:31 2015
The Central Govt enhanced the limits for plant and machinery, but working capital should also be encouraging. The working capital for MSME units shall be increased to 3 Crore without collateral security for smooth running units. And NPA accounts of existing units shall be revived and enhanced as per needs of the unit. Further NPA holding units shall be revived with support of State and Central departments and organisations while purchasing their requirements and those products shall be reserved strictly from the MSME units. To that effect a G.O. shall be issued by the Finance department in consultation with the Industries Departments.NPA units shall be encouraged with more funding and enable the units to bring them to normalcy by giving concession in VAT, CENVAT, EXISE DUTY exemption for supplying to State and Central Departments and Semi Govt Organisations and Exports. Banks are taking stringent steps to recover the dues. Instead NPA units if they are interested to revive and run theie units to profitability, Banks shall encourage with additional Working Capital and also for Plant and Machinery. Thought MSME units are capable of working more to profitability, they are curbed due to short of sufficient Working Capital. For supplying to Govt, Semi Govt departments, organisations, for Exports, For Defence Orders sufficient Working Capital shall be sanctioned to fullfill the supply in time.
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