New Delhi, July 30: Swadeshi Jagran Manch (SJM), an affiliate organisation of the RSS, has demanded from the government to halt the process of change in the definition of MSMEs which is planned through a bill of Parliament.
SJM demands, "We urge Prime Minister Narendra Modi and MSME Ministry to immediately halt the process of passage of the bill in the interest of the small industries, make in India, entrepreneurship development and our youth with a dream of working for India."
It was decided by the cabinet on February 7 to amend the definition of MSME. At present, Micro units are those that employ plant and machinery worth up to Rs 25 lakh, whereas for Small Scale Enterprises this limit is Rs 5 crore and for Medium Industries this limit is Rs 10 crore. The basis of this definition is being tweaked from cost of plant and machinery to turn over basis, by introducing a bill in Parliament.
According to the proposed definition, micro-units would be defined as those units with an annual turnover of Rs 5 crore. For small units this limit would be Rs 75 crore and for medium units, this limit would be Rs 250 crore.
"This is our considered opinion that there is no reason or legitimacy to change the definition of MSME. We should not forget that even this concept of clubbing of Micro, Small and Medium enterprises in one category is also not good as nature and problems of each of their types of units are very much different and we need to keep non manufacturing enterprises separate for non-manufacturing enterprises, for promoting manufacturing in the country," said Ashwini Mahajan of SJM.
He said that small scale industries (SSIs) need to be supported by the government agencies but despite the government creating a full fledged ministry dedicating to MSME, new economic policy, obsession of political leadership and bureaucracy for globalisation and corporate world, several such policies are made that are detrimental to the interests of SSIs and favouring big corporate at the cost of SSIs.
SJM said that SSIs have been playing an important role in GDP growth, employment, exports and decentralisation. This is despite the onslaught of globalisation faced by them, open trade policy causing flooding of Chinese products giving unjust competition, plethora of laws and complete absence of ease of doing business and numerous other problems including marketing, finance, technical issues etc.
The first victim of the New Economic Policy was product based reservation for SSIs as reservation was successively withdrawn causing destruction of SSIs on a large scale. Along with this policy of preference for procurement was also drastically tweaked. Despite SSIs being in the priority sector category, MSMEs face problems with availability of finance; policies regarding marketing, technical assistance and Industrial estates became subject matters of history.
"With the introduction of GST, facility of excise duty exemption of SSIs up to Rs 1.5 crore was automatically withdrawn; however there was partial resolution of this issue, when SSIs were given relief by way increasing the scope of 'Composition Scheme' and reduction in the rates of GST," added SJM.