CII statement on change in msme definition

CII welcomes the Cabinet’s decision of changing the criteria to define micro, small and medium enterprises (MSMEs) based on their “annual turnover” from investment in “plant and machinery/equipment”.

Commenting on the decision,Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry CII said,  “As India strives to develop its industry with greater scale and sophistication, the announcement of considering MSME definition based on ‘turnover’ comes at an opportune time. This will enable the most optimized blend of all factors of production – land, labour, capital and enterprise and lead to higher economic growth. In turn, this will foster higher productivity, greater efficiency, improved competitiveness, and increased employment in the sector which continues to be the backbone of our economy.  The definition, while facilitating ease of doing business will alsoencourage scale, skill, sophistication and speed in the sector.

Chandrajit Banerjee

Further, the new turnover based criterion while aligning itself with the GST regime would prove to be a good tool to assess the contribution of MSMEs to GDP, added Mr Banerjee.

As per new classification a micro enterprise will be defined as a unit with annual turnover less than or equal to ₹5 crore, a small enterprise with the annual turnover more than ₹5 and less than ₹75 crore and medium enterprise with annual turnover more than ₹75 and less than ₹250 crore.