Ease of Doing Business for MSMEs: MSME Minister Narayan Rane on Wednesday said he will take up MSMEs’ suggestion of increasing the current turnover limit of small enterprises in the new MSME classification with the Finance Ministry and Prime Minister Narendra Modi. The request to enhance the turnover limit from current up to Rs 50 crore to Rs 100 crore was made by multiple industry associations in a meeting with Rane and other top officials of the MSME Ministry in New Delhi.
“The request was made by a number of bodies out of more than 100 associations present at the event. Currently, the gap between the maximum turnover of a small enterprise and a medium enterprise is quite large — from up to Rs 50 crore to up to Rs 250 crore. The challenges faced by a business with turnover let’s say Rs 51 crore is different from what a business with a turnover of Rs 250 crore face,” Mukesh Mohan Gupta, President, Chamber of Indian Micro, Small & Medium Enterprises (CIMSME) told Financial Express.
In such a scenario, small enterprises stand to lose out on schemes given to micro and small enterprises (MSEs) particularly such as CGTMSE and hence, CIMSME had also recommended increasing the limit to Rs 100 crore for small enterprises, Gupta added.
However, other associations opined that the move would end up bringing businesses relatively bigger than micro enterprises into the MSE fold and eat into the latter’s share of benefits. “The apprehension was that the benefits meant for MSEs will be shared with comparatively bigger companies. On the (MSME) policy front, there was no mention of it by the minister,” Anil Bhardwaj, Secretary-General, Federation of Indian Micro Small & Medium Enterprises (FISME) told Financial Express Online.
The government had revised the MSME definition in 2020 to bring more businesses under the MSME ambit. Businesses up to Rs 1 crore investment and Rs 5 crore turnover were categorised under micro segment from earlier less than Rs 25 lakh investment. Likewise, less than Rs 10 crore investment and Rs 50 crore turnover were considered small businesses vis-a-vis up to Rs 5 crore investment earlier. For medium enterprises, the investment limit was expanded from less than Rs 10 crore to less than Rs 50 crore along with up to Rs 250 crore turnover. The revised definition had removed the distinction between the manufacturing and services sectors.
Meanwhile, a large number of associations at the meeting were left unheard of their recommendations on addressing various MSME challenges. “It was a great insult to MSME associations. Out of 100 odd participants, only a few got to interact with the government. It was a namesake event called for interaction but there was no interaction between associations and the minister,” KE Raghunathan, Convenor, Consortium of Indian Associations (CIA) told Financial Express Online.
However, in a clarification on his comment, Raghunathan in a statement on Friday said while only a few associations got to speak in front of the MSME Minister Narayan Rane, who had to leave for a GoM meeting suddenly convened by Prime Minister Narendra Modi, the other ministry officials including secretary, joint secretary, development commissioner MSME sat through the meeting.
“As I am given to understand now, they patiently listened to all issues presented by the members invited in an alphabetical manner and took note of the issues and suggestions and promised to take them up seriously and find a feasible redressal to MSMEs at the earliest. The intent of the ministry was very evident, with such a meeting being organised after several years and also in understanding core issues and expectations from the stakeholders. I am clarified on this from a senior official from the ministry,” Raghunathan added in his clarification.
This story, published on April 27, 2022, was updated with a clarification by KE Raghunathan, Convenor, Consortium of Indian Associations (CIA) on his original comment.