Union Cabinet headed by Prime Minister Narendra Modi officially revised the definition of Micro, Small and Medium Enterprises (MSMES) based on the Investment in Plant & Machinery/Equipment and (see N.B) Turnover. Government of India’s revised definition of MSMEs will be effective from July 1, 2020.
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Objectives
- Many MSMEs do not expand their businesses because of the fear of losing the benefits provided to MSMEs due to outgrowing MSME definition. As the definition has been upwardly revised relatively large enterprises will come within the ambit of MSME. MSME Minister Nitin Gadkari, on June 1, 2020, said that the definition had been widened to help a wider section of companies to avail various sops announced for the sector.
- Nitin Gadkari said, “Government plans to raise MSMEs contribution to: India’s export to 60% from the current 48%, India’s GDP from 29% to 50%”.
- Nitin Gadkari said, “Government plans to create 5 crore new jobs. Until now we have created 11 crore new jobs”. He added that he was keen on developing Indian MSMEs of international standard.
- Nitin Gadkari said, “Export turnover will be excluded from definition”.
