Reclassification of MSMEs will boost employment and Ease of Doing Business

NewsBharati    14-Feb-2018
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New Delhi, February 14: A major breakthrough came across when the Cabinet decided to make a change in the MSMEs (Micro, Small & Medium Enterprises) classification from investment in plant and machinery to turnover criteria in Ease of Doing Business as a step towards synchronizing business firms with GST. This will eventually boost the economy and benefit the employment sector and also give a enhancement over to the GDP of the country.


 
Minister of Textile, Smriti Irani said that the reclassification of MSMEs and 5 % reduction in tax on annual turnover of companies up to Rs. 250 crore will help manufacturing and increase employability in textiles sector. She also emphasized that a boost in the manufacturing sector will ultimately lead to more production in the domestic criteria and increase in customs duty on silk and manmade fibre will discourage cheap Chinese textile products from flooding the market and benefit domestic manufacturers in the power loom sector.

While appreciating the Cabinet decision on reclassification of the MSMEs and increasing the limit of micro (where the annual turnover does not exceed 5 crore rupees), small enterprises (where the annual turnover is more than 5 crore rupees but does not exceed Rs 75 crore) and medium enterprises ( where the annual turnover is more than 75 crore rupees but does not exceed Rs 250 crore), would go a long way to expand production possibilities frontiers of MSMEs and create new employment opportunities in the economy.

The GST Network and other methods of establishing will help in having non-discretionary, transparent and objective criteria and eliminate the need for inspections, thus making the classification system progressive and evolutionary.

Over the years, the MSME sector has emerged as an important vehicle for attaining inclusive growth in the country. It is noted that the reclassification of MSMEs would go a long way to increase their share in GDP significantly to the level of 50% in the coming times.

The recent reforms undertaken by the Government in the fate of MSMEs such as reducing the corporate tax to 25% (for turnover less than Rs. 250 crore) and reclassification are appreciable and in line with the industry expectations.

Reclassification Textile Industry Employment Smriti Irani