“The Group of Secretaries is of the view that turnover and employment should be included in the definition, as is done the world over. So, an informal Group of Ministers will now look into the matter,” Mishra said during the meeting of National Board of MSMES.
The group will include Mishra, along with Finance Minister Arun Jaitley, Road Transport Minister Nitin Gadkari, among others, he added.
At present, MSMEs are defined only on the basis of investment in plant & machinery — of up to ₹25 lakh as micro, up to ₹5 crore as small and up to ₹10 crore as medium enterprises. For the services sector, the limit is ₹10 lakh, ₹2 crore and ₹5 crore, respectively.
However, the report submitted by the one-man committee, comprising the former Cabinet Secretary, is not in favour of using turnover and employment to define MSMEs, as “these do not add anything worthwhile over the present system.”
Since each sector has different requirements of plant, machinery and labour, the committee suggested appropriate investment bands for each sub-sector, and also recommended that the Centre decide on the investment limit from time to time, rather than seek Parliament approval.
Once the definition is revised, the capital investment limit, turnover and employee number etc., is expected to be higher for units engaged in, say, auto ancillaries, aerospace, defence sectors, IT among others, rather than those making garments, furniture etc.
Source: BusinessLine