Pointing to a few measures concerning micro, small and medium enterprises (MSME), the Karnataka Small Scale Industries’ Association (KASSIA) has said that the Union government was creating a hostile environment for the sector.
In a press conference here on Friday, KASSIA president Basavaraj S. Javali said the government’s redefinition of MSME units and the manner in which the Goods and Services Tax was imposed on them were proving to be fatal for the sector with its far-reaching negative impacts.
“As per the MSME Act 2006, the units with an investment up to ₹25 lakh in plant and machinery were classified as micro enterprises; those with an investment between ₹25 lakh and ₹5 crore in the same segment as small, and the relatively bigger units with an investment between ₹5 crore and ₹10 crore as medium enterprises. Now, the Union government is going to redefine these units on the basis of turnover. Accordingly, units having a turnover up to ₹5 crore would be considered as micro; those with a turnover between ₹5 crore and ₹75 crore as small, and the relatively bigger ones with a turnover between ₹75 crore and ₹250 crore as medium. This will bring even larger industries under the ambit of MSME and thereby facilitate them to snatch benefits such as subsidies and reduced interest rates on loans that were hitherto meant for smaller industries,” he said.
According to Mr. Javali, the new definition removes the distinction between manufacturing and service sectors.