The centre is planning to enhance the turnover limit for a medium enterprise to Rs 200 crore in a bid to allow more units to avail the benefits unveiled for the micro, small and medium enterprises (MSMEs).
According to the Economic Times report, the government may modify the just announced definition of MSME, lifting the turnover limit for medium enterprises from Rs100 crore.
On May 13, the union Finance Minister Nirmala Sitharaman had announced a new definition for MSMEs as part of the Rs 20 lakh crore economic package. Moreover, she had announced a Rs 3 lakh crore credit guarantee scheme to offer collateral-free loans to MSMEs.
As per the new definition, the investment limit is raised to Rs 1 crore from Rs 25 lakh and secures the turnover limit at Rs 5 crore for businesses to be termed as micro units.
Businesses that has an investment of up to Rs 10 crore and turnover of up to Rs 50 crore will be termed as small, while businesses with an investment of up to Rs 20 crore and turnover of Rs 100 crore are to be classified as medium units, as per the new definition.
However, the new definition is yet to be notified. There are around 65 million business enterprises that are a part of the MSME category and the planned change has large implications for the sector.