What is The New Definition of MSME as Per Finance Minister Nirmala Sitharaman?

New Delhi: Addressing a press briefing on the details of the grand Rs 20 lakh crore economic stimulus package announced by Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman expanded on his vision of ‘Atmanirbhar Bharat’ and revised the definition of Micro, Small & Medium Enterprises (MSMEs). Also Read – From MSMEs to Income Tax Returns: Nirmala Sitharaman’s Briefing on Rs 20 Lakh cr Package | Highlights

“Definition of MSMEs has been revised, investment limit to be revised upwards, additional criteria of turnover also being introduced,” the Finance Minister said. Also Read – Deadline For Filling Income Tax Return For FY 2019 -20 Extended: Here’s The New Date

Under the new definition, the finance ministry changed the criteria for micro, small and medium manufacturing and services enterprise to aid small businesses come out of the financial loss faced due to the coronavirus lockdown. Also Read – PM Garib Kalyan Yojana: FM Announces Rs 2500 Crore EPF Support For Businesses, Workers

The finance ministry also removed the difference between manufacturing and service MSMEs.

What are the new criteria for turnover size?

A. For micro businesses – manufacturing and services, the investment limit has been revised to up to Rs 1 crore and the required turnover has been revised to Rs 5 crore.

B. For small businesses, the investment limit has been revised to up to Rs 10 crore and the required turnover has been revised to Rs 50 crore.

C. For medium businesses, the investment limit has been revised to up to Rs 20 crore and the required turnover has been revised to Rs 100 crore.

Definition of MSMEs has been revised, investment limit to be revised upwards, additional criteria of turnover also being introduced: Finance Minister Nirmala Sitharaman pic.twitter.com/BHYcGWD9H2

— ANI (@ANI) May 13, 2020

Finance Minister Sitharaman also announced a major booster for MSMEs to resume business activities post the lockdown period. “In a major initiative, we announce Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. Borrowers with up Rs 25Cr outstanding and Rs100 Cr turnover are eligible,” the minister said, adding that it would enable as many as 5 lakh MSME units to “resume business activity and also safeguard jobs”.