FICCI welcomes the Central Government's decision to change the criteria of classification of Micro, Small and Medium Enterprises from "Investment in Plant & Machinery and equipment" to "Annual Turnover". The decision will scrap the long-pending MSME Amendment Bill 2015 in Lok Sabha under which it was proposed to increase the upper ceiling of investment in Plant & Machinery and equipment.
FICCI has been long advocating the need to have annual turnover based definition for MSMEs as it will bring them in alignment with universal definition and hence easier to create business linkages with global counterparts. "Turnover based criteria also helps bring alignment in definition across sectors and will create a level playing field," said Mr. Rashesh Shah, President, FICCI.
MSME are run generally by a single proprietor and their key stakeholders include family or relatives. There is a thin line of differentiation between private and business assets of MSMEs and hence they are not able to assess what is to be included or excluded while calculating their investment in assets.
"The change in the norms of classification will certainly improve the ease of doing business for MSMEs and bring in transparency. It will also pave the way for increased direct and indirect employment in the MSME sector of the country," added Mr. Shah.
FICCI also hails another decision made by Reserve Bank of India under which Central Bank of the country has extended the NPA period upto 180 days from the existing 90 days for MSMEs registered under GST with aggregate standard exposure up to Rs 25 crore and amount overdue as on September 2017 to make payment of loans to their creditors including banks and NBFCs. Mr. Shah pointed out that this move will help in the cash flow and may result into reducing the MSME NPAs.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.