Date:April 1, 2023
MSME turnover Limit – What is MSME Latest turnover Limit
Law notes by NB Associates
Micro, Small and Medium Enterprises (MSMEs) are an integral part of any economy. They are the backbone of economic development in many countries, particularly in developing ones. MSMEs contribute significantly to the Gross Domestic Product (GDP), employment, and exports of a country.
The Government of India has taken several measures to promote and support MSMEs, including setting a turnover limit. This article will discuss the MSME turnover limit and its significance.
The MSME turnover limit is the maximum amount of revenue that an MSME can generate in a financial year. The turnover limit is defined based on the investment in plant and machinery or equipment for manufacturing or service enterprises.
In May 2020, the Government of India revised the MSME turnover limit to provide benefits to more enterprises. The new turnover limits for MSMEs are as follows:
Micro enterprises: Turnover up to INR 5 crore
Small enterprises: Turnover up to INR 50 crore
Medium enterprises: Turnover up to INR 250 crore
The above MSME turnover limit was notified vide notification dated 01.06.2020 being no F. No. 2/1(5)/2019-P&G/Policy (Pt.-IV). The same came into effect on 01.07.2020.
The revised MSME turnover limit has benefited many small businesses that were previously classified as large enterprises. These businesses can now avail of several benefits that were previously available only to MSMEs, such as credit guarantee schemes, government subsidies, and tax exemptions.
The MSME turnover limit is significant for several reasons, including:
1. Promoting Small Businesses:
The MSME turnover limit promotes small businesses and encourages entrepreneurship. The limit allows small businesses to avail of benefits and support from the government, which helps them to grow and expand their operations.
2. Employment Generation:
MSMEs are significant contributors to employment generation in the country. The turnover limit ensures that small businesses have access to benefits and support, which helps them to create more jobs and boost economic growth.
3. Access to Credit:
The MSME turnover limit allows small businesses to access credit facilities easily. Banks and financial institutions are more willing to lend to MSMEs as they are seen as less risky than large enterprises. The credit guarantee schemes offered by the government also make it easier for MSMEs to obtain loans.
4. Increase in Exports:
MSMEs are significant contributors to exports in many countries. The MSME turnover limit allows small businesses to avail of government subsidies and other benefits to boost their exports. This helps to increase the overall export revenue of the country
5. Promotion of Innovation:
MSMEs are often more innovative than large enterprises. The MSME turnover limit encourages small businesses to invest in research and development, which promotes innovation and creativity.
The MSME turnover limit is a significant policy measure that promotes small businesses and encourages entrepreneurship.
The revised MSME turnover limit has benefited many small businesses that were previously classified as large enterprises.
The turnover limit ensures that small businesses have access to benefits and support, which helps them to grow and expand their operations.
The MSME turnover limit also contributes significantly to employment generation, access to credit, increase in exports, and promotion of innovation.
Overall, the MSME turnover limit is a crucial policy measure for promoting the growth and development of small businesses in India.
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