SME Times News Bureau | 23 Dec, 2019
Industry body PHD Chamber on Monday asked the government to
amend the definition for classification of MSMEs on the basis of turnover to
usher in growth.
The proposed definition "defines a micro enterprise as a unit where the
annual turnover does not exceed Rs 5 crore, a small enterprise as a unit where
the annual turnover is more than Rs 5 crore but does not exceed Rs 75 crore and
a medium enterprise as a unit where the annual turnover is more than Rs 75
crore but does not exceed Rs 250 crore".
According to D.K. Aggarwal, President, PHD Chamber of Commerce and Industry,
the MSME sector is critical in meeting the national objectives of generating
employment, reducing poverty and slowing rural-urban migration.
The proposed definition will help in directing the benefits of economic growth
to the intended beneficiaries, he said in a statement.
At present, the definition is based on whether MSMEs produce goods or render
services.
This definition, based on investment in plant and machinery for manufacturing
MSMEs and investment in equipment for service sector MSMEs was introduced in
the year 2006 through the Micro, Small and Medium Enterprises Development Act.
MSMEs contribute around 32 per cent in gross value added, employ around 111
million people and have a contribution of more than 48 per cent in total
exports of India.