Classifying MSME will promote growth of the sector and boost investment: CM
SHIMLA---- Welcoming the decision of the Union cabinet in classifying the Micro, Small and Medium Enterprises (MSME) on basis of annual turnover, Chief Minister Jai Ram Thakur said that it would not only benefit the micro, small and medium enterprises but they could be now exactly categorized on the basis of their inherent ability. This is an honest classification of MSME and also it reflects the level of operations so that all concessions and facilities for which they were eligible can be focused on without ambiguity.
I believe that the decision will further ease doing of business. This will promote the growth of MSME sector and especially after the onset of GST regime. This decision will also boost more investment in MSME sector as of flexible criteria for them has been put in place.
Now the micro enterprise will be classified as having annual turnover of less than or equal to five crore, similarly small enterprise having turnover of more than five crore but does not exceed Rs. 75 crore and the medium enterprises now will be those having annual turnover more than Rs. 75 crore but does not exceed Rs. 250 crore.
The Chief Minister said that now the entrepreneurs would not have to undergo the tedious formalities of proving themselves as now the enterprises would automatically move on to the requisite slot after achieving a specific turnover discouraging unwanted formalities and inspections.
He also lauded the decision of central bank and to increase the repayment period of MSME, before they could be included in period of Non Performing Asset (NPA) from existing 90 days to now 180 days. This will give ample time to the enterprises and there will be more financial flexibility. The step will increase liquidity in the market and open scopes for more employment which in furtherance of Prime Ministers Narendra Modi's vision of providing more avenues of employment and self employment to the youth.
Presently the banks and non banking financial Corporations in India generally classified a loan account as NPA based on 90 days and 120 days delinquency norms, respectively.
Industries Minister Shri Vikram Singh said that this incentive would be in interest of industrial units as 90 days was too short a period to give entrepreneurs the opportunity to perform normally. He hoped that the centre government will certainly provide incentives the state has asked for and also the extension of package and concessions. He said that there was massive growth of industrial in NDA regime whereas despite the revenue accumulation as much as employment increased by 88 percent.
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