Government introduces bill to raise investment limits for MSME units

New Delhi: The government on April 20 introduced a bill in the Lok Sabha to enhance the investment limits for micro, small and medium enterprises and also made a provision for enhancing it further through a notification. The investment limits in plant and machinery for the micro enterprises is proposed to be raised to Rs 50 lakh, of small enterprise to Rs 10 crore and medium enterprise to Rs 30 crore.

The existing limit are Rs 25 lakh, Rs 5 and Rs 10 crore respectively. These investment limits were fixed by the Micro, Small and Medium Enterprises Development (MSMED) Act in 2006. The amendment bill introduced by Micro, Small and Medium Enterprises Minister Kalraj Mishra in the Lok Sabha proposes to raise the limits in view of rise in input costs.

"It is proposed to amend the MSMED Act to enhance the existing limit for investment in plant and machinery considering changes in price index and cost of inputs consistent with the emerging role of the MSMEs in various global value chain," said Mishra in the statement of objects and reasons for the bill.

The bill also seeks to empower the central government to revise the investment limits through a notification, the statement said. The classification of a unit as a micro, small or medium enterprise entitles them to avail certain concessions from the government as well as the banks.

There will, however, be separate investment limit for enterprises classified as micro, small or medium in services sector. The proposed investment limit will be Rs 10 lakh for micro, Rs 5 crore for small and Rs 15 crore for medium enterprises in the services sector.