Laghu Udyog Bharti unhappy with change in definition of MSMEs on turnover basis
New Delhi, Nov 15 (KNN) Several representatives from the Micro, Small, and Medium Enterprises (MSMEs) have strongly condemned the Centre’s proposed move to change the definition of the later based on a company’s turnover instead of investments in plant and machinery.
According to media reports, Laghu Udyog Bharti (LUB) has said that there won't be any difference between traders and manufacturers, if the definition will be change on turnover basis and not on investments in plant and machinery.
''The benefits for the MSME sector will go to both manufacturing and traders. In such a scenario, manufacturers would not want to take the pain to do business. People who want to set up their units will be discouraged," says Janak Bhatia, President, Laghu Udyog Bharti, Uttar Pradesh.
In a joint press release issued by the Swadeshi Jagran Manch and the LUB, it was suggested that the definition criteria of micro and small industry should be based only on investment in plant and machinery with ceiling for micro enterprises fixed at Rs 50 lakh and for small enterprises fixed between Rs 50 lakhs and Rs 5 crore.
“It is very important that the micro and small industry is not only protected but promoted and preferred in the national economic and industrial policy to get demographic advantage, boost GDP growth and make the ecosystem more equitable and inclusive,” the release stated.
Meanwhile, The Karnataka Small Scale Industries’ Association (KASSIA), in a separate release, alleged that the Centre was creating a hostile environment for the MSME sector.
At present, MSMEs are classified on the basis of investment in plant and machinery for manufacturing units, and investment in equipment for services enterprises. Under the goods category, the slabs are up to Rs 25 lakh for micro, Rs 25 lakh to Rs 5 crore for small and Rs 5-10 crore for medium. In the case of services, the slabs are: up to Rs 10 lakh, Rs 10 lakh to Rs 2 crore and Rs 2-5 crore.
As per the new criteria which is being considered by the Centre, units with a turnover up to Rs 5 crores would be considered as micro, those with a turnover between Rs 5 crores and Rs 75 crore would be defined as small which medium industry would be those with turnover between Rs 75 crores and Rs 250 crores.