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Development in MSME Sector


As a measure to help the MSMEs grow, the Government, vide notification no.S.O. 2119 (E) dated 26.06.2020, has notified composite criteria of classification of MSMEs based on investment in plant and machinery or equipment and turnover of the enterprise. The new criteria is effective from 1.7.2020. However, to provide hassle free transition from old system of Udyog Aadhaar Memorandum to Udyam Registration, 31.03.2021 has been fixed as deadline. The New criteria provides that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium. There is no difference between manufacturing and service sector enterprises. The actual figures for Turnover with different investment limits depend upon a variety of socio-economic factors such as demand from consumers, Inflation, availability of labour and raw materials, price fluctuations, etc., in different cases. There is no uniform investment / turnover ratio. The new composite criteria is expected to bring about many benefits. This will also help in attracting investments and creating more jobs in the MSME sector. Moreover, the Udyam registration portal developed by this Ministry has facilitated MSMEs by providing the MSMEs to link themselves with (i) GeM portal for ensuring their participation in Government procurements, (ii) linkages with TReDS platform for helping the MSEs in realizing their delayed payments (iii) In case of change in status as a result of re classification due to changes in investment or turnover, the benefit associated with the status would be effective from 1st April of the financial year following the year in which such change took place.

This information was given by Pratap Chandra Sarangi, Minister of State for Micro, Small and Medium Enterprises in written reply to a question in Lok Sabha today.
(UPDATED ON 22ND SEPT 2020)