New Delhi : "Change in the MSMEs classification from investment in plant and machinery to turnover criteria is a major breakthrough in the Ease of Doing Business for MSMEs and a step forward in synchronisation of business firms with GST," said President, PHD Chamber, Anil Khaitan.
Reclassification of MSMEs to boost Ease of Doing Business, increase GDP share: PHD Chamber
Change in Classification Criteria of MSMEs
"The reclassification is in line with PHD Chamber's expectations and the consequent growth will pave way for the increased participation of MSMEs in India's expanding growth trajectory," he added.
"The reclassifying of Micro, Small and Medium enterprises from investment in plant and machinery/equipment to annual turnover will expand the number of MSMEs in the country," Anil Khaitan said.
"The GST network and other methods of ascertaining will help in having non discretionary, transparent and objective criteria and eliminate the need for inspections, thus, making the classification system progressive and evolutionary," he said.
"Over the years, the MSME sector has emerged as an important vehicle for attaining inclusive growth in the country. The sector accounts for 45 percent of manufactured and close to 40 percent of all exports from the country, provide employment to more than 100 million people and contribute at around 37-38 percent in GDP if the services sector MSMEs are also included," said Khaitan.
"However, in OECD economies, MSMEs contribute more than 50 percent in the GDP," he added.
"The reclassification of MSMEs would go a long way to increase their share in GDP significantly to the level of 50 percent in the coming times," said Anil Khaitan.
"The recent reforms undertaken by the government in the fate of MSMEs such as reducing the corporate tax to 25 percent (for turnover less than Rs. 250 crore) and reclassification are appreciable and in line with the industry expectations," he concluded.