Sitharaman additionally declared that there can be no extra distinction between Manufacturing and Service MSMEs.
“Earlier, the criteria for manufacturing units and service units were different. Now those distinctions between Manufacturing and Service MSMEs are being removed. They will all be defined similarly,” she mentioned.
MSMEs will now be known as Micro models if they’ve investments upto Rs 1 crore and turnover of lower than Rs 5 crore. The definition earlier was on funding standards of as much as Rs 10 lakh for Service MSMEs earlier and Rs 25 lakh or manufacturing.
For an MSME to be outlined as a Small unit, its funding restrict has been raised from Rs 5 crore to Rs 10 crore with a turnover of lower than 50 crore. This applies to all MSMEs together with the Service enterprises which earlier got here below funding of as much as Rs 2 crore.
Enterprises with investments as much as Rs 20 crore with a turnover of lower than Rs 100 crore will now be known as Medium models. Earlier, the funding restrict for Medium models was as much as Rs 10 crore and Service enterprises as much as Rs 5 crore.
“The definition being changed is done in the favour of MSMEs. There has always been this fear, among successful MSMEs also, that if they outgrow the size of what has been defined as an MSME, they will lose their entitled benefits. This is why MSMEs like to remain within the definition rather than grow. With the revised definitions of MSMEs, they will not have to worry about growing their size and can still avail benefits,” she mentioned.