FM Nirmala Sitharaman revises definition of MSMEs

During the press briefing, Finance Minister Nirmala Sitharaman, while detailing the economic stimulus support for MSMEs, said that there is an urgent need to re-defining what micro, small and medium enterprises are.

MSME, which stands for Micro, Small, and Medium Enterprises, has now a revised definition.

"Low threshold in MSME definition has created a fear among MSMEs of graduating out of the benefits and hence killing the urge to grow," the ministry said in a statement.

The ministry said that the definition of MSMEs will be done upwards and that additional criteria of turnover also will be introduced.

Finance Minster Nirmala Sitharaman also said that distinction between manufacturing and service sector will also be done away with.

Micro: Companies with an investment of less than one crore and a turnover of less than 5 crore will be listed under micro.

Small: Companies with an investment of less than 10 crore and a turnover of less than 50 crore will be listed under small.

Medium: Companies with an investment of less than 20 crore and a turnover of less than 100 crore will be listed under small.

Further, she said that e-market linkage across the board will be provided for all MSMEs to help access new markets. She said that the government and CPSEs will release all payments due to MSMEs within the next 45 days.

In the briefing, the finance minister said that Rs 3 lakh crore for MSMEs with a 12-month moratorium to be given. "We will provide Rs 3 lakh crore collateral-free automatic loans for MSMEs. This will benefit 45 lakh units so they can resume business activities."

She also said that a subordinate debt scheme for stressed MSMEs will be introduced, which will benefit about 2 lakh MSMEs from it.

FM announced 15 different measures on Wednesday out of which six of them were for MSMEs.