The micro, small and medium scale industries (MSME) limit will increase by 25 times to give a boost to the slowdown economy. Sources have told Hindustan on Wednesday that in the new system, the limit of MSME can be increased from Rs 10 crore to Rs 250 crore. Government can resort to ordinance for this arrangement.
Sources said that the government will give the status of micro-industries to the people doing business up to Rs 5 crore annually. Businessmen with annual turnover from Rs 5 crore to Rs 75 crore will be classified as small scale industries. At the same time, businesses ranging from 75 crores to 250 crores will be in the category of medium industries. The government is also working on creating separate categories of businesses according to the annual turnover. More than three sections are being considered for the manufacturing sector alone. These will have different definitions for gems and jewelery, auto components and textiles.
Under the new law, the government will also provide a strong system like eliminating the payment related problems related to these industries and giving GST returns on time. In the current era, MSME traders contribute just 29 per cent of the country’s GDP. The government wants to increase it to 50 per cent in the next five years.
Currently only categories of manufacturing and services sector: In the current system, MSME traders are divided into two categories in terms of business. Manufacturing sector and service sector. In the manufacturing sector, businesses up to Rs 25 lakh have been classified as micro industries, small industries from Rs 25 lakh to Rs 5 crore, and businesses ranging from Rs 5 to 10 crore have been classified as medium industries.
There has been a demand from traders for a long time that at the speed with which the economy has changed in the last several years, the input cost of traders has also increased. Also, many business turnover has also seen a big change compared to earlier. Due to this, many industries are out of the purview of MSMEs. Now the government is taking steps towards strengthening them again. The government has created an additional fund of 5000 crores to rescue the submerged or bad debt traders in the MSME sector. After more companies come under this ambit, in future the government can also increase the amount of this fund. At the same time, there is also a system of special purpose vehicle to make it easier for these traders to raise money through foreign investors and crowd funding, which will obviously benefit more traders in the new system.
Preparing for change like this
- Government will change the definition of medium and small scale industries with micro and small industries
- There will be different definition for different categories according to annual turnover
- Considering creating more than three categories for manufacturing sector ‘Different definitions for gems and jewelery, auto components and textile industry
Delay in payment and GST refund will be confirmed in new law
Businessmen have been demanding for a long time
Traders across the country have been demanding for a long time to change the definition of MSME according to the extent of business. Traders say that the speed with which the economy has seen changes in the last several years has increased input costs. There is also a big change in turnover. Due to this, many industries are out of the purview of MSMEs. Now the government is taking steps towards strengthening them again. The government has created an additional fund of 5000 crores to rescue the submerged or bad debt traders in the MSME sector. With more companies coming in, the amount can also increase.
This will benefit you
Increasing the scope of micro, small and medium industries will not only benefit the economy of the country but will also increase India’s penetration in the global market. Due to the subsidies available to traders, their production will increase and export of increased production will also be possible in the worldwide markets. Apart from this, good news can come on the employment front. After subsidies, businessmen will increase their units, which will obviously provide employment opportunities for newcomers.