India Inc welcomes change in criteria for classifying MSMEs
India Inc on Thursday welcomed the government’s move to change the criteria for classifying MSMEs saying it will ease the cash flow for businesses and increase employment in the sector.
Industry bodies also cheered the Reserve Bank’s decision to give micro, small and medium enterprises (MSMEs) an additional up to 180 days to clear their dues to banks, saying it may result into reducing the non-performing assets (NPAs).
The Union Cabinet on Wednesday approved the change in criteria for classifying MSMEs from ‘Investment in Plant & Machinery’ to annual turnover.
As per the new classification, enterprises having annual turnover less than or equal to Rs 5 crore fall under the ‘micro’ category.
Units having turnover between Rs 5 crore to Rs 75 crore will be classified as small enterprises, whereas those having turnover between Rs 75 crore and Rs 250 crore will be classified as enterprises.
“This will foster higher productivity, greater efficiency, improved competitiveness, and increased employment in the sector which continues to be the backbone of our economy,” CII Director General Chandrajit Banerjee said.
He said the new turnover based criterion while aligning itself with the GST regime will prove to be a good tool to assess the contribution of MSMEs to GDP.
“The change …read more