The government is likely to revise its definition of what constitutes small and medium enterprises (SMEs) soon.
Instead of companies with an annual turnover of up to ₹10 crore, companies with revenue of up to ₹250 crore will be termed SMEs, according to a proposal under the government’s consideration.
“The decision, on whether and to what extent the definition of SMEs would be expanded to include companies with high turnover, should happen in a few days,” said Nitin Gadkari, Minister of Road Transport and Highways and MSME while speaking with the members of Young President's Organisation (YPO) through video conference on Friday.
YPO is a leadership community of more than 29,000 chief executives in 130 countries.
Several members representing SMEs asked Gadkari if and when the earlier announced move to revise SMEs’ turnover definition to ₹250 crore from the present ₹10 crore will be finalised. It is not clear if the revised turnover norms, if they are announced soon, will also apply to the ₹10,000-crore fund of funds, which is awaiting the Cabinet nod. Under this scheme the government will put in 15 per cent equity in SME firms with good credit rating, that are able to successfully mop up funds from the market.
The government is implementing a proposal where SMEs with good track record could be rated and offered incentives. The MSME and Finance Ministries have already approved the proposal which envisaged that NSIC (National Small Industries Corporation) and/or another body will control it. The move will help MSMEs with good track record in the GST system, export potential and AAA ratings to raise funds from the stock market.
Gadkari said while the lockdown is getting lifted, organisations should ensure that their workers and executives are taken care of — by providing food, shelter and maintaining social distancing norms.
“Otherwise, the relaxation will prove to be very expensive,” he said.