Reclassification of MSMEs from Investments to Turnover Criteria to Boost Ease of Doing Business, Increase Share in GDP: PHD Chamber
“Change in the MSMEs classification from investment in plant and machinery to turnover criteria is a major breakthrough in the Ease of Doing Business for MSMEs and a step forward in synchronisation of business firms with GST,” said Mr. Anil Khaitan, President, PHD Chamber.
Change in Classification Criteria of MSMEs
“While appreciating the Cabinet decision on reclassification of the MSMEs and increasing the limit of micro (where the annual turnover does not exceed five crore rupees), small enterprises (where the annual turnover is more than five crore rupees but does not exceed Rs. 75 crore) and medium enterprises (where the annual turnover is more than seventy five crore rupees but does not exceed Rs. 250 crore), would go a long way to expand production possibilities frontiers of MSMEs and create new employment opportunities in the economy,” said Mr. Khaitan.
Anil Khaitan, President, PHD Chamber
“The reclassification is in line with PHD Chamber’s expectations and the consequent growth will pave way for the increased participation of MSMEs in India’s expanding growth trajectory,” said Mr. Anil Khaitan, President, PHD Chamber.
“The reclassifying of Micro, Small and Medium enterprises from investment in plant & machinery/equipment to annual turnover will expand the number of MSMEs in the country,” he added.
“The GST Network and other methods of ascertaining will help in having non discretionary, transparent and objective criteria and eliminate the need for inspections, thus, making the classification system progressive and evolutionary,” said Mr. Khiatan.
“Over the years, the MSME sector has emerged as an important vehicle for attaining inclusive growth in the country. The sector accounts for 45% of manufactured and close to 40% of all exports from the country, provide employment to more than 100 million people and contribute at around 37-38% in GDP if the services sector MSMEs are also included,” said Mr. Khaitan.
“However, in OECD economies, MSMEs contribute more than 50% in the GDP,” added Mr. Khaitan.
“The reclassification of MSMEs would go a long way to increase their share in GDP significantly to the level of 50% in the coming times,” said Mr. Khaitan.
“The recent reforms undertaken by the Government in the fate of MSMEs such as reducing the corporate tax to 25% (for turnover less than Rs. 250 crore) and reclassification are appreciable and in line with the industry expectations,” said Mr. Khaitan.