Prime Minister Shri Narendra Modi announced Rs 20 lakh crore fiscal stimulus equivalent to 10 per cent of India’s GDP to deal with COVID-19 situation in the country, the Union Finance Minister Nirmala Sitharaman announced the following changes in the MSME sector to promote the motto of Self Reliant India and boost the economic status of the Country.
Changes in MSME Act
The definition of MSME has now been revised by raising the investment limit. Additionally, turnover criterion is introduced and the distinction between manufacturing and services sector has been done away with. Henceforth, a unit with up to ₹1 crore investment and ₹5 crore turnover will qualify as a micro unit, investment up to ₹10 crore and turnover up to ₹50 crore will qualify as a small unit, and investment up to ₹20 crore and turnover up to ₹100 crore will qualify as a medium enterprise. Below is the comparison between the definition of MSMEs under the existing classification and the revised classification: