Higher turnover limit notified for MSMEs; Move to enable more small cos to be eligible for sops
The Centre has implemented new investment and turnover thresholds for MSMEs, effective April 1, increasing the limits to ₹2.5 crore for micro enterprises, and up to ₹500 crore for medium enterprises. This change addresses inflation-related anomali...
By ET Bureau | Updated:
Representative image.
New Delhi: The Centre has notified the enhancement of investment and turnover threshold for micro, small and medium enterprises (MSMEs) reclassification, putting into effect the budget announcement. This will come into force on April 1, with micro enterprises reclassified as firms having investments in plant and machinery up to ₹2.5 crore and turnover of ₹5 crore.
Similarly, small and medium enterprises are reclassified as firms with investments in plant and machinery up to ₹5 crore and ₹125 crore, and turnover of ₹100 crore and ₹500 crore, respectively.
"Enhancement in MSME definition addresses the anomaly crept in due to inflation as turnovers ballooned on raw material price hikes. The move also paves the way for MSMEs to build scale and become competitive," said Anil Bhardwaj, secretary general, Federation of Indian Micro and Small & Medium Enterprises.
The reclassification also allows more small enterprises to be eligible under the government's public procurement policy. Earlier, the enterprises exceeding the ₹50 crore turnover threshold for small enterprises couldn't avail benefit of MSE (micros and small) status.
Under the policy, 25% of the government's annual procurement, including central public sector enterprises, central ministries and departments, needs to be made from MSEs.
