MSMEs new definition and criterion to come into effect from July 1

New Delhi: The Ministry of Micro, Small & Medium Enterprises on Wednesday said that from July 1, MSMEs across the country will be classified on the basis of the new criteria approved by the government.

The revision in MSME definition was announced in the Atmnirbhar Bharat package on May 13, 2020 by Finance Minister Nirmala Sitharaman.

The definition of Micro manufacturing and services units was increased to Rs 1 Crore of investment and Rs 5 Crore of turnover.

The limit of small unit was increased to Rs 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of medium unit was increased to Rs 20 Crore of investment and Rs 100 Crore of turnover.

The Government on June 1 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs 50 Crore of investment and Rs 250 Crore of turnover.

Also, a new composite formula of classification for manufacturing and service units has been notified. Now, there will be no difference between manufacturing and service sectors. Also, a new criterion of turnover is added.

The Ministry officials have said that the new definition will pave way for strengthening and growth of the MSMEs.

Particularly, the provision of excluding the exports from counting of turnover will encourage the MSMEs to export more and more without fearing to loose the benefits of a MSME unit. This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs.