'MSMEs must be categorised on turnover, employees' no basis'

Categorising MSMEs solely on the basis of investments in plant & machinery is not in line with the current reality, says NSIC CMD H P Kumar

Micro, small and medium enterprises must be categorised on the basis of annual turnover and number of employees not solely by investment, a senior official of the National Small Industries Corporation has said.

"Categorising MSMEs solely on the basis of investments in plant & machinery is not in line with the current reality. Instead, they must be categorised on the basis of their annual turnover or the number of employees," NSIC CMD H P Kumar said.

Kumar said there are several industrial units which fall in the small industries category but have huge earning, citing the example of bakery and textile sectors.

At present, industrial units having investment up to Rs 25 lakh in plant & machinery are categorised as micro enterprises, while those putting in Rs 25 lakh to five crore fall in the category of small enterprises. Besides, industrial units investing between Rs 5 crore and Rs 10 crore are categorised as medium enterprises.