New Delhi, Feb 13 (KNN) The MSME sector is the backbone of Indian Economy in terms of output, exports and job creation and plays a significant role in the growth of economy. In order to boost the MSME s sector, volume of measures has been adopted by government in the recent Union budget 2018 like tax concessions for MSMEs, Financial Services Secretary Rajiv Kumar said recently.

Besides this, RBI has also introduced various measures for MSMEs, worst hit by the implementation of GST by giving additional 180 days to clear their dues, he added.

Kumar further said that the measures are towards making A the 6.33-crore MSME enterprises growth engine for new India.

Listing steps, Kumar informed that the government is eyeing at recapitalization of the banks to enable them to enhance their lending capacity by Rs 5 lakh crore and a substantial part of this would go towards the MSME sector.

He further mentioned that the Finance Minister Arun Jaitley in his Budget speech lowered the corporate tax rate to 25 per cent from 30 per cent for companies with a turnover of up to Rs 250 crore, benefiting the entire MSME sector.

As part of alignment with the new taxation regime, the Union Cabinet last week also approved the change in criteria for classifying MSMEs from ‘Investment in Plant & Machinery’ to annual turnover.

According to the new classification, enterprises with annual turnover of less than or equal to Rs 5 crore fall under the ‘micro’ category’ and Units with turnover between Rs 5 crore to Rs 75 crore will be classified as small enterprises, whereas those with turnover between Rs 75 crore and Rs 250 crore will be classified as enterprises.

In an official statement he said “the move will encourage ease of doing business, make the norms of classification growth- oriented and align classification norms to the new tax regime revolving around GST.”

On considering the feedback received from the stakeholder and in line with the rising importance of service sector in our economy, it has been decided to remove the currently applicable loan limits of Rs crore and Rs 10 crore per borrower to MSME (Services) respectively, for classification under priority sector, he further added. (KNN/YV)