With a vision to create more job opportunities in the MSME sector, the Union Government revised the guidelines of classification for MSMEs. The revision in MSME definition will cover more units under MSMEs. The additional turnover criteria has been added in MSME classification along with the investment criteria.
The new MSME definition – turnover to define MSMEs
Revised Definition of the MSMEs:-
1. Micro Enterprises: Entities having investment of Rs. 1 Crores and Annual Turnover upto 5 Crores
2. Small Enterprises: Entities having investment of Rs. 10 Crores and Annual Turnover upto 50 Crores
3. Medium Enterprises: Entities having investment of Rs. 20 Crores and Annual Turnover upto 10 Crores
Changes in MSME Classification:-
i. Manufacturing and Services Sector have been merged
ii. Limits of Investments in Plant and Machineries / Equipments has been revised upwards
iii. Additional Turnover Criteria has been introduced
The revised definition of MSMEs is to be implemented via an amendment that would further refine the business scenario for Indian enterprises.
The Union Cabinet approved the amendment to change the criteria to classify MSMEs from “investment in plant and machinery / Equipment” to “annual turnover.”
MSME stands for Micro, Small, and Medium Enterprises. MSMEs are covered under and protected the Micro, Small, and Medium Enterprises Development (MSMED) Act in 2006.