The MSME Ministry has proposed raising the capital ceiling for manufacturing and services sector units to help them keep pace with the changing business environment.
"The need for a change in definition of micro, small and medium enterprises (MSMEs) has been raised by the various stakeholders from time to time considering changes in price index and dynamic market situation," the MSME Ministry said.
"The Ministry of micro, small and medium enterprises proposes to address this issue through Micro, Small and Medium Enterprises Development Act, 2006 by way of amending the provision relating to definition of MSMEs," it added.
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The proposal suggests doubling the capital ceiling for manufacturing units of micro enterprises from Rs 25 lakh at present to Rs 50 lakh. Similarly, for small enterprises, it proposes to hike the limit from Rs 5 crore to Rs 10 crore.
It has also suggested tripling the limit for medium enterprises from Rs 10 crore to Rs 30 crore.
For services sector units, the proposal entails doubling the investment limit in plant and machinery from Rs 10 lakh to Rs 20 lakh for micro enterprises. For small enterprises belonging to the category, it has suggested raising the limit from Rs 2 crore to Rs 5 crore; whereas for medium enterprises the proposed increase is from the present Rs 5 crore to Rs 15 crore.
In line with the above proposed amendments, the government has also unveiled the draft of the Micro, Small and Medium Enterprises Development (Amendment) Act, 2014. The proposed changes are to the present Act, namely the Micro, Small and Medium Enterprises Development Act, 2006.
