New Delhi (IANS) The revised definition will give micro, small and medium Enterprises (MSMEs) confidence to grow and will promote their expansion, Confederation of Indian Textile Industry (CITI) Chairman T. Rajkumary said on Monday.
The industry body welcomed the decisions of the Union Cabinet chaired by Prime Minister Narendra Modi for providing economic support to MSMEs, farmers, street vendors and the agricultural sector.
He said MSMEs, which have a 29 per cent share in the country's GDP and 48 per cent share in the country's exports and provide employment to millions of people, will receive maximum benefits from the change in the definition of MSME under which turnover limit for medium enterprises has been revised upward.
Under the new definition, the distinction between manufacturing and services enterprises has also been eliminated.
The CITI Chairman pointed out that in the revised definition, even small weaving mills may be able to come and because of this, many garment manufacturers will be benefited.
The Centre's revision in the definition of MSMEs will give MSMEs the much-needed confidence to grow and will promote its seamless expansion in the country, he said.
He also welcomed the decision of Distressed Asset Fund of Rs 4,000 crore created to help weaker MSMEs that are struggling through NPA norms due to the outbreak of Covid-19 pandemic. This fund will bring them back into the business and they can start the business activities afresh with the help of this fund, he said. Further Rs 20,000 crore subordinated debt for stressed MSMEs is likely to benefit 2 lakh stressed MSMEs.
As per the new definition, businesses with investment of less than Rs 1 crore and turnover of Rs 5 crore would be classified as micro enterprises while, the businesses with investment of Rs 10 crore and the turnover of less than Rs 50 crore will come under small enterprises.
Similarly, companies with investment of Rs 50 crore and turnover of up to Rs 250 crore would be classified as medium enterprises.