After the Union Cabinet decided to widen the definition of micro, small and medium enterprises (MSMEs) and announced that entities with turnover up to Rs 250 crore or investment up to Rs 50 crore would qualify as medium enterprises, the Congress, here on Monday, termed it as the "headline management by the government".
Briefing the media on the cabinet decision, MSME Minister Nitin Gadkari said the changes would benefit over 6 crore MSMEs that together employed 11 crore people.
Reacting to the decision, former Union Minister Jairam Ramesh tweeted, "This is Maximum Headlines, Minimum Deadlines. First, PM announces that FM will announce package. Second, FM announces package. Third, Gadkari regurgitates what PM and FM have said."
Announcing an increase in investment limits for MSMEs on May 13, Finance Minister Nirmala Sitharaman said an additional criteria of turnover had been introduced for recognition of an MSME.
Sitharaman had also announced new definition of medium enterprises as one with Rs 20 crore investment and machinery, and Rs 100 crore turnover. The cabinet enhanced it further on Monday.
As per the new definition, businesses with less than Rs 1 crore investment and Rs 5 crore turnover would be classified micro enterprises. Under the existing criteria, a manufacturing sector company with less than Rs 25 lakh investment and the services sector firm with below Rs 10 lakh investment were considered micro enterprises.
The cabinet has changed this distinction as well and a unified criteria will be applied for micro enterprises. The investment limit of small enterprises has been increased to Rs 10 crore, and the companies would have to have less than Rs 50 crore turnover.
Further, the medium enterprises criteria has been extended from companies with Rs 20 crore investment and Rs 100 crore revenue to firms with Rs 50 crore investment and up to Rs 250 crore turnover.
( With inputs from IANS )