Lawstreet Journal

Cabinet Approves Alteration in MSME Definition to Aid Ease of Doing Business Amid COVID-19

Lawstreet Journal 3 Jun 2020 7:55pm

Image courtesy: Lawstreet Journal Executive Cabinet Approves Alteration in MSME Definition to Aid Ease of Doing Business Amid COVID-19

Government of India, on Monday, 1st June 2020, approved the revision in the definition of MSMEs to accordingly improve the ease of doing business. 

For micro-enterprises, the investment and turnover limits have been increased to Rs 1 crore and Rs 5 crore, respectively. On the other hand, for small enterprises, the investment and turnover limits were increased from Rs 1 crore and Rs 5 crore to Rs 10 crore and Rs 50 crore respectively. Similarly, for medium-sized enterprises, the investment limit was increased to Rs 50 crore and the turnover limit was increased to Rs 250 crore.

 The announcement was made in a press briefing by Environment Minister Prakash Javadekar, MSME Minister Nitin Gadkari, and Agriculture Minister Narendra Singh Tomar. Cabinet also sanctioned the Rs 50,000 Crore Equity Scheme for MSMEs, which was reportedly announced earlier this month by Union Finance Minister Nirmala Sitharaman, with a Fund of Funds Corpus of Rs 10,000. 

The program would, therefore, enable small to medium-sized companies to be mentioned on the stock exchanges. The Fund would be run by a mother fund and a few daughter funds. This is higher than the definition announced by Sitharaman as part of the Rs 20 lakh- crore Atmanirbhar Bharat package to counter the economic and social impact of the Covid-19 pandemic and the consequent lock-down, which set the investment limit for medium-sized enterprises at Rs 20 crore and Rs 100 crore. 

The revision of definition was announced by Union Finance Minister Nirmala Sitharaman as part of the economic package from the… Continue Reading...


Tagged: Union Cabinet  
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