The new turnover based classification of MSMEs
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will accordingly be amended to define units producing goods and rendering services in terms of annual turnover as follows:
- A micro enterprise will be defined as a unit where the annual turnover does not exceed Rs 5 crores;
- A small enterprise will be defined as a unit where the annual turnover is more than Rs 5 crore but does not exceed Rs 75 crore;
- A medium enterprise will be defined as a unit where the annual turnover is more than Rs 75 crore rupees but does not exceed Rs 250 crore.
The Ministry of Micro, Small and Medium Enterprisesis striving to increase the number of micro and small industries in the country on a sustainable basis through implementation of various schemes andprogrammes. The Ministry provides better credit facility, technology upgradation and skilling to boost the entire MSME eco-system.
Followings are the major schemes being implemented by Ministry of MSME:
(i) Prime Minister’s Employment Generation Programme (PMEGP): This is a credit-linked subsidy programme aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth. The Scheme was launched during 2008-09. A total of 5.45 lakh micro enterprises have been assisted with a margin money subsidy of Rs.12074.04crore, providing employment opportunities to an estimated 45.22 lakh persons since PMEGP’s inception till 31.03.2019.
An amount of Rs. 2247.10 crore has been allocated under PMEGP for financial year 2019-20 which is substantially higher with respect to allocation in earlier financial year which would further lead to increased number of units assisted and employment generation.
(ii) Scheme of Fund for Regeneration of Traditional Industries (SFURTI): It is a cluster-based scheme for development of khadi, village industries and coir clusters by providing them with improved equipments, common facilities centers, business development services, training, capacity building and design and marketing support, etc. SFURTI Scheme has been revamped in 2015. A total of 34,791 artisans have benefitted with an assistance ofRs. 143.15 crore during 2018-19.
(iii) A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE): was launched on 18.3.2015 to set up a network of technology centres and to set up incubation centres to accelerate entrepreneurship and also to promote start-ups for innovation and entrepreneurship in agro-industry. Under ASPIRE, 74 Livelihood Business Incubation (LBI) centres and 11 Technology Business Incubators have been approved since inception of the scheme.
(iv) Coir Board: Ministry of MSME, through Coir Board, is also implementing various Schemes/programmes to assist entrepreneurs to set up new Micro, Small and Medium Enterprises (MSMEs) in all coconut producing states. Under Coir VikasYojna, 36,30,653 employment opportunities have been created since 2014-15 till 2018-19 in the Coir Sector.
(v) Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE): The scheme facilitates credit to the MSE units by covering collateral- -free credit facility (term loan and /or working capital) extended by eligible lending institutions to new and existing micro and small enterprises. The Scheme has extended guarantee cover to over 35 lakh enterprises leading to approx. 1 crore employment generation. During FY 2018-19, a total of 4,35,520 proposals have been approved providing guarantee to a tune of Rs. 30,168 crore.
(vi) Credit linked Capital Subsidy Scheme (CLCSS): CLCSS facilitates technology upgradation of small scale industries, including agro & rural industrial units by providing 15% upfront capital subsidy (limited to maximum of Rs.15.00 lakhs). Since inception of the scheme in 2000-01 till date, a total of 62,827 MSE units have been assisted utilizing subsidy of Rs.3888.13 crore.
During 2018-19, a total of 14,155 MSE units have been assisted utilizing subsidy of Rs. 980.44 crore.
(vii) Micro & Small Enterprises-Cluster Development Programme (MSE-CDP):The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the Cluster Development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. A cluster is a group of enterprises located within an identifiable and as far as practicable, contiguous area and producing same / similar products / services.
During 2018-19, 17 Common Facility Centres and 11 Infrastructure Development projects have been established.
Employment provided by Micro, Small and Medium Enterprises
Micro, Small and Medium Enterprises are the largest provider of employment after agriculture. As per the 73rd Round of National Sample Survey (NSS) conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation during the period 2015-16, the estimated number of workers in unincorporated non-agriculture MSMEs in the country engaged in different economic activities excluding the MSMEs registered under (a) Sections 2m(ii) of the Factories Act, 1948, (b) Companies Act, 1956 and (c) Construction activities falling under Section F of National Industrial Classification (NIC), 2008, are 11.10 crore.
Under the Prime Minister’s Employment Generation Programme (PMEGP,) the estimated employment generated (number of persons) in micro enterprises during the years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 are 3.58 lakhs, 3.23 lakhs, 4.08 lakhs, 3.87 lakhs and 5.87 lakhs, respectively.
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector. Under the PMEGP scheme, the estimated employment generation has increased from 3.58 lakh to 5.87 lakh during the year 2014-15 to 2018-19.
The Ministry has established 18 Tool Rooms for integrated development of the industries by way of providing quality tools, trained personnel and consultancy in tooling and related areas and upgradation of technology. During the year 2017-18 and 2018-19, these 18 Tool Rooms provided training to 1.47 lakh and 2.08 lakh persons respectively, which has also helped them in self employment.
The Government has taken various steps for generating employment in the country like encouraging private sector of economy, fast tracking various projects involving substantial investment and increasing public expenditure on schemes like Prime Minister’s Employment Generation Programme (PMEGP), Mahatma Gandhi National Rural Employment Guarantee Scheme ( MGNREGA), Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and Deendayal Antyodaya Yojana- National Urban Livelihood Mission (DAY-NULM). The Make in India, Skill India, Digital India schemes are being implemented by the Government and these are likely to enhance the employment base. MUDRA and START UP schemes have been initiated by the Government for facilitating self employment. In order to improve the employability of youth, Ministries/Departments run skill development schemes across various sectors. Government has also implemented the National Career Service (NCS) Project. Pradhan Mantri Rojgar Protshahan Yojana has been initiated in the year 2016-17 for incentivizing industry for promoting employment generation.