New Delhi, Dec 23 (SocialNews.XYZ) Business body PHD Chamber on Monday urged the government for an amendment in the definition for classification of MSMEs on the basis of turnover to usher in growth.
The proposed definition "defines a micro enterprise as a unit where the annual turnover does not exceed Rs 5 crore, a small enterprise as a unit where the annual turnover is more than Rs 5 crore but does not exceed Rs 75 crore and a medium enterprise as a unit where the annual turnover is more than Rs 75 crore but does not exceed Rs 250 crore".
According to D.K. Aggarwal, President, PHD Chamber of Commerce and Industry, the MSME sector is critical in meeting the national objectives of generating employment, reducing poverty and slowing rural-urban migration.
The proposed definition will help in directing the benefits of economic growth to the intended beneficiaries, he said in a statement.
At present, the definition is based on whether MSMEs produce goods or render services.
This definition, based on investment in plant and machinery for manufacturing MSMEs and investment in equipment for service sector MSMEs was introduced in the year 2006 through the Micro, Small and Medium Enterprises Development Act.
MSMEs contribute around 32 per cent in gross value added, employ around 111 million people and have a contribution of more than 48 per cent in total exports of India.
Source: IANS
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