The Centre’s proposal to change the definition of Micro, Small and Medium Enterprises (MSMEs) has been opposed by the Swadeshi Jagran Manch, a Rashtriya Swayamsevak Sangh affiliate that deals with economic issues.
In February, the Centre decided to revise the definition of MSMEs on the basis of turnover instead of the existing methodology of classifying them as per cost of plant and machinery. To give effect to this decision, the Centre has already moved a new Bill in Parliament in the ongoing monsoon session.
“We are of the firm opinion that this definitional change would be detrimental to the interests of small scale industries. It’s notable that nowhere in the world we find definition of MSMEs based purely on turnover. It’s important and interesting to note that 98 per cent of small units have a turnover of less than ₹15 crore. That means, with this change in definition hardly 2 per cent would attain the status of MSMEs at the cost of 98 per cent,” said the National Co- convenor of the Swadeshi Jagran Manch, Ashwini Mahajan.
Detrimental policies
“Due to the obsession of political leadership and bureaucracy for globalisation and corporatisation, several policies were made which were detrimental to the interests of Small Scale Industries (SSIs) and favoured big corporate at the cost of SSIs,” Mahajan said.
“This is our considered opinion that there is no reason or legitimacy for this change in definition of MSME,” he added.
Mahajan also said the change in definition would incentivise small industries entrepreneurs to shun their industries and become importers/traders or assembly units. He urged the Prime Minister Narendra Modi and the MSME Ministry to immediately halt the process of passage of the MSME Bill in the interest of the small industries.
“It is feared that with change in definition, small and medium enterprises would be able to enjoy the benefits of MSME by shifting from manufacturing to trading and assembling,” he said.