Revised investment, turnover criteria from April 1 to help MSMEs scale up, boost job creation: Experts

The revised investment and turnover criteria for micro, small and medium enterprises (MSMEs), effective from April 1, is expected to offer greater opportunities for growth and expansion, resulting in increased job creation, according to experts.

The government has notified significant revisions to the turnover and investment criteria for classifying MSMEs. Under the revised criteria, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times, respectively.

"The revised and increased eligibility should enable those MSMEs who have had good growth to grow further by giving them increased headroom to continue to grow. It should be especially beneficial for new micro enterprises as they can scale up with the various fiscal incentives available, especially with regard to access to finance," Ashok Saigal, Co-Chairman of CII National MSME Council, told PTI.

He further said the growth of MSMEs is expected to boost employment creation.

MSMEs with investments up to Rs 2.5 crore will now be classified as micro enterprises, from the previous threshold of Rs 1 crore. The turnover limit has been revised from Rs 5 crore to Rs 10 crore.

Units with investments up to Rs 25 crore will be classified as small enterprises, from the earlier Rs 10 crore. The turnover limit for such enterprises has been doubled from Rs 50 crore to Rs 100 crore.

MSMEs with investments up to Rs 125 crore will now be classified as medium enterprises, from the earlier limit of Rs 50 crore. For medium enterprises, the turnover limit has been doubled to Rs 500 crore.

During her Budget speech, Union Finance Minister Nirmala Sitharaman had announced new classification criteria for MSMEs.

"To help them (MSMEs) achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times, respectively. This will give them the confidence to grow and generate employment for our youth," the Finance Minister said in her Budget speech on February 1.