Enhancement of turnover limit of MSME sector to help exporters

The government's decision to increase the turnover limit for medium units from Rs 100 crore to Rs 250 crore will help infuse technology and promote automation in certain sectors and boost outbound shipments, according to exporters.

Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that exclusion of exports turnover from total turnover will help in internationalisation of MSMEs and will bring their focus on exports.

"This will also benefit a lot of gems and jewellery companies, who would have breached the MSME criteria due to sheer cost of their inputs," he said in a statement.

The cabinet on Monday approved further increasing the limit for medium manufacturing and service units to Rs 50 crore of investment and Rs 250 crore of turnover.

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.

"The move is most pragmatic and will also infuse technology as in certain sectors margins are so low that enhancement in investment in plant and machinery would not have been of much use unless accompanied by increase in turnover limit to Rs 250 crore.

Such a move will also bring automation of certain processes which are required for competitive manufacturing," he added.

Hailing the decisions on MSME sector, financial advisory firm Findoc Group MD Hemant Sood said that MSMEs are the backbone of the Indian economy and the highest employer of skilled labour.

"The decision by the government to allow listing of MSMEs will help them in longer term and become a growth engine for their revival," Sood said.

Apparel Export Promotion Council (AEPC) Chairman A Sakthivel also said that as the exporters' turnover depends upon the foreign exchange rates and since rupee value has continuously weakened for the last 10 years, the council had requested the government to remove the turnover criterion for defining MSMEs in the exports sector.

"Today's decision will propel India's exports and strengthen the MSME sector, which is the key to India becoming self-reliant. Further, the decisions to allow MSMEs get listed and the provision of distressed asset fund for MSMEs will give a major stimulus to the sector, job generation and revival of the economy," Sakthivel said.

The enhancement in the investment and turnover limits for medium sized enterprises will help in increasing exports of textiles by making them more competitive in the global markets, The Cotton Textiles Export Promotion Council (TEXPROCIL) said.

TEXPROCIL Chairman K V Srinivasan said this is a welcome decision as a large number of exporters in the textiles sector can now be classified as MSMEs under the new criteria and will be eligible to get all the benefits extended to the MSMEs including 5 per cent interest equalization scheme.

He said that these decisions will lead to an increase in exports of textiles by making them more competitive in the global market, which in turn will lead to employment generation.