New MSME definition fails to house G&J sector!
In a measure to support the MSMEs to fight the rock-hard scenario of Covid-19, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi met on Monday, 1st June 2020. This was the first meeting of the Union Cabinet after the Central Government entered into its second year in office. During the meeting, historic decisions were taken that will have a transformative impact on the lives of India’s hardworking farmers, MSME sector and those working as street vendors.
In an attempt to EoDB, Micro, Small and Medium Enterprises popularly called as MSMEs are the backbone of Indian economy. Silently operating in different areas across the country, more than 6 crore MSMEs have a crucial role to play in building a stronger and self-reliant India.
In the aftermath of Covid-19 pandemic, the ministries were quick to recognise the role of MSMEs in building the Nation. That is why MSMEs formed a very prominent part of the announcements made under the Atmanirbhar Bharat Abhiyaan.
In the row related ministry including MSMEs related minister said all about the revised & revisited definition of MSMEs to accommodate numbers of small & medium players to bag the advantages & also as a supportive measure by the government.
These included an upward revision of MSME Definition. This is yet another step towards ease of doing business. This will help in attracting investments and creating more jobs in the MSME sector; Proposal for provisioning of Rs 20K crore as subordinate debts to provide equity support to the stressed MSMEs has been formally approved by the cabinet today. This will benefit 2 lakh stressed MSMEs.
Proposal for equity infusion of Rs. 50,000 crores for MSMEs through fund of funds has also been approved by the Cabinet. This will establish a framework to help MSMEs in managing the debt-equity ratio and in their capacity augmentation. This will also provide an opportunity to get listed in stock exchanges.
In the row, Colin Shah, Chairman, GJEPC) said in a statement that, “In the Gems and Jewellery Sector more than 85% exporters constitute as MSME who deal in very high-value goods. The existing MSME definition did not exclude the export turnover and hence was not helpful for the Gem & Jewellery (G&J) sector.”
Council represented the issue in one of the meetings and requested Hon’ble MSME Minister Shri Nitin Gadkari to exclude the export turnover from MSME turnover. We are glad that through the new MSME definition and exclusion of export turnover cap of Rs.250 crore a large number of exporters of our sector will be benefited.
This would also help to revive the exports in this difficult time.
We thank the Govt and the pragmatic leadership for this great step forward. The initiative of the government to increase the bandwidth of MSME by increasing the investment criteria and excluding exports for calculation of turnover criteria will make the MSME more updated in machinery and technology and it would enable them to grow the export business and bring valuable foreign exchange into the country.
Availability of other MSME benefits like interest subvention and other related measures announced by the government will make them more competitive in the international arena”.
Here readers have to remember that the related MSME ministry had said at the time of releasing guideline, “the new definition will pave way for strengthening and growth of the MSMEs. Particularly, the provision of excluding the exports from the counting of turnover will encourage the MSMEs to export more and more without fearing to lose the benefits of an MSME unit.”
This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs. Now at the juncture swiftly the MSME ministry has to look in to!