Of course, the decision of the Government of the Union of Microavt and Medium Enterprises (MSMES) has caused anxiety among some representative bodies, which disputed on micro and small firms.
Declared by the Minister of Finance Nirala Sitarama in her Budget Speaking in February, review increased the investment cap for each of the three sections – 2.5 times and the circulation cap twice. In other words, some enterprises that are still on average are now small enterprises, and some small enterprises are now micro enterprises.
In the letter to the MSME Ministry, on March 12, Laghi Uuio Bharati – RSS, for micro and small enterprises, to help the Angle’s benefits to small firms. Indian Express has learned.
In India, micro and small enterprises contribute to a 25 percent public procurement quota and generally msmes are eligible for lending to the priority.
“Laghu Udyog Bharati predicts the unfavorable impact of the above-mentioned improvements on micro and retail units that make up about 99.99 percent of MSMES, while they are below 0.01 percent, the MSME secretary reports. “Consequently, at this stage, Msmes classification will not serve any useful purpose, and it is required to restore existing standards yet,” added it.
What is Reviewed Criteria for MSME Classification?
Before April 1, micro enterprises were set as investments to Rs 1 Crore and annual turnover until Rs 5 Crore. The threshold for small enterprises in investment is 10 Rs Rs եւ 50 at Rs Brore Turnover, and for medium enterprises, it was 50 Rs invested in circulation 250 Rs Brore.
In his budget speech, Sitarama said investments and circulation Bounds will be improved Msmes to “gain confidence and working for our youth.”
History continues under this ad
“Help them achieve higher efficiency, technological modification and better access to capital, and all MSMES classification and circulation will increase 2.5 and twice,” he said.
The last change in recent change was completed in 2020.
Epidemic effect
In his letter, Laghu Widogi claims that it is conditioned Covid 19 Pandemic in 2020 and 2021 Msmes have a negative impact, and that it will be difficult to assess them as of this moment.
“Consequently, it would soon be the increase in the level of investment 2.5 times and double the turnover level for different Msmes categories, and no tangible benefits can be reconsidered, simply reviewing their classification.
History continues under this ad
“It simply came to our notice then.
However, the Secretary General of the Indian Micro and Small and Medium Enterprise Federation, Anil Bardwaj, welcomed the strengthening of the fact that the regular revision of investment and circulation borders is important, especially when. Inflation And geopolitical events increase the costs of raw materials and, in turn, in the circulation of single.
Credit problems of “missing middle” and micro, small enterprises
Another reason quoted for review is to promote vertical integration of firms, unlike horizontal growth, which brings great productivity.
“There are very few enterprises in India. There is “missing in the middle”, as firms prefer to be a little more effective, “said Bhaharvaj.
History continues under this ad
According to Bhadvaj, the third reason for review should significantly increase the investment border, which will allow foreign investors to study joint ventures in India to benefit from lending to the priority sector.
In his letter, Laghu Uderrogi stressed that despite MSMES is eligible for lending to the priority sector, about 8% are separated for micro enterprises, credit flows.
“Our experience is that the bank channels are the public sector or private bank, in general, avoid their limited loans and other loans. This fact.
Laghu Widog Bharat also asked to create a separate section of micro and small enterprises, claiming that “in order to protect such a vulnerable part of society, it is necessary to compete in any way.”
