MSMEs are pillars of economy
PHD Chamber of Commerce and Industry has urged the government for amendment in the definition of Micro, Small and Medium Enterprises (MSMEs) to rejuvenate economic growth.
The Chamber calls for an amendment in the definition for MSME classification on the basis of turnover as it is in the interest of the growth and development of MSMEs and the country as a whole.
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 Rs5 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.
PHD Chamber sees the MSME sector critical in meeting the national objectives of generating employment, reducing poverty and slowing rural-urban migration.
Therefore, the proposed definition will help in directing the benefits of economic growth to the intended beneficiaries.
MSMEs are the pillars of economic growth as they contribute around 32% in gross value added; employs around 111 million people (36.2 million in manufacturing, 38.71 million in trade and 36.28 million in other services) with a contribution of more than 48% in total exports of India.
At present, the MSME 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.
Going forward the new criteria for defining an MSME could promote the ease of doing business as the process of identification and dealings with MSMEs would become simpler and faster.
Also, the proposed criteria is in line with the criteria which is internationally applied and understood, said Dr D K Aggarwal.
“We propose the amendment to be made in the forthcoming session of parliament, as it will enable more than 90% of registered companies to boost and provide an impetus to the growth of our manufacturing GDP as well as provide employment and slowly make a turn around to see that India once again is back on its growth trajectory of US$5 trillion economy,” said Dr Aggarwal. fiinews.com
