Business Studies, asked by ayushmankumar79913, 14 days ago

State the need of creating MSMED Act, 2006 and explain the criterion fixed by Act (amendment in 2020) for differentiating between Micro, small and medium enterprises.​

Answers

Answered by 521UMESH00
1

Answer:

Ministry of MSME gears up to implement the New Norms of classification of MSMEs

As stated earlier, the upper ceiling for classification of MSMEs now has been raised

New definition and criterion notified; will come into effect from 1st July, 2020.

As part of new definition, Exports will not be counted in turnover for any enterprises whether micro, small or medium.

Detailed guidelines along with other clarifications and regulations being issued separately

Handholding mechanism named "Champions" in place to assist MSMEs

Posted On: 03 JUN 2020 12:37PM by PIB Delhi

Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has issued Gazette notification to pave way for implementation of the upward revision in the definition and criteria of MSMEs in the country. The new definition and criterion will come into effect from 1st July, 2020.

After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmnirbhar Bharat package on 13th May, 2020. As per this announcement, the definition of Micro manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. The limit of small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of medium unit was increased to Rs. 20 Crore of investment and Rs. 100 Crore of turnover. The Government of India on 01.06.2020 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover.

The existing criterion of definition of MSMEs is based on the MSMED Act, 2006. It was different for manufacturing and services units. It was also very low in terms of financial limits. Since then, the economy has undergone significant changes. After the package announced on 13th May, 2020, there were several representations saying that the announced revision is still not in line with market and price conditions and hence it should be further revised upwardly. Keeping in mind these representations, Prime Minister decided to further increase the limit for medium Units. This has been done in order to be realistic with time and to establish an objective system of classification and to provide ease of doing business.

Explanation:

Mark me as brilliant answer

Similar questions