Giving the MSME sector a much needed push, the Centre on Monday moved a Bill to amend the existing Micro, Small and Medium Enterprises Development (MSMED) Act to enhance the limit for investment in plant and machinery in such units. The amendment Bill was introduced in the Lok Sabha.
The investment limits in plant and machinery for micro enterprises is proposed to be raised to ₹50 lakh, small enterprises to ₹10 crore and medium enterprises to ₹30 crore. The existing limits are ₹25 lakh (micro), ₹5 crore (small) and ₹10 crore (medium) for these three categories.
The existing investment limits were prescribed in 2006. Since then, there has been a significant increase in the price index and cost of inputs.
There has also been a change in the business environment with many MSMEs becoming part of the domestic and global value chains, according to the statement of objects and reasons to the Bill. The investment limit is therefore proposed to be hiked considering all these changes.
Investment criteria Considering inflation and the dynamic market situation, the Bill also proposes to empower the Central Government to periodically revise the criteria for investment.