MSME New Definition: The new MSME definition has been accepted by the Union Cabinet. MSMEs have been reclassified based on the amount of money they may invest and the magnitude of their revenue. Medium Units will now be classified as businesses with a capital investment of up to Rs 50 crore and a revenue of up to Rs 250 crore. Finance Minister Nirmala Sitharaman has already proposed a number of economic initiatives as part of the Rs 20 lakh crore Atmanirbhar Bharat Abhiyaan, which aims to rebuild India’s economy in the wake of the COVID-19 pandemic. The package includes radical business reforms, with a particular focus on the Micro, Small, and Medium Enterprises (MSME) sector. Learn about the several initiatives announced to help the MSME sector, including a new definition and greater investment limits.
There are a total of 6 changes to revitalise the MSME sector, according to the PDF file issued by the government on Atmanirbhar Bharat Abhiyaan. These are the following:
- Rs 3 lakh crores Collateral free Automatic Loans
- Rs 20,000 crore Subordinate Debt for MSMEs
- Rs 50,000 crore equity infusion through MSME Fund of Funds
- New Definition of MSMEs
- Global tender to be disallowed up to Rs 200 crores
- Other interventions for MSMEs
New Definition of MSME
MSMEs have been concerned that if they exceed the threshold limitations, they will be forced to close their doors. They will no longer be eligible for the benefits they have been receiving. Fear has stifled their desire to expand in terms of size and turnover. Taking this into account, the FM rewrote the MSME definition in their favour. The government has taken the following steps to redefine the MSME:
– Increased Investment Limit
– Introduced additional criteria of turnover
– Eliminated difference between Manufacturing & Service sector
– Amendments to law will be made
Take a look at the new MSME definition:
- Micro Units: Companies with Investments up to Rs 1 crore & Turnover of below Rs 5 crore.
- Small Units: Companies with Investment of up to Rs 10 crore & Turnover of below 50 crore
- Medium Units: Companies with Investment of up to Rs 50 crore & Turnover of below Rs 250 crore (Revised)
The Following are The Differences between Old and New MSME:
