Profits derived from the exports of products by micro, small and medium enterprises (MSME) will be excluded from the overall turnover of a company, the government announced on Monday. Three senior members of the Modi 2.0 cabinet- Union Environment Minister Prakash Javadekar, Roads, Highways and MSMEs Minister Nitin Gadkari and Agriculture and Rural Development Minister Narendra Singh Tomar- were addressing a press briefing after the completion of the first cabinet meeting on the completion of Modi 2.0's first year in office.
Union Minister incharge of the MSME sector Nitin Gadkari, while making the major announcement, also revealed that the cabinet had approved the altered definition of MSMEs, which has increased the scope of their investment and turnover.
The enterprises with an investment of less than Rs one crore and turnover less than Rs 5 crore will be treated as micro, while businesses with less than Rs 10 crore investment and Rs 50 crore turnover will fall under the small category. The medium enterprises will be those which have an investment less than Rs 50 crore and turnover less than Rs 250 crore. Those companies involved in exporting products overseas will have their export revenues excluded from the overall turnover.
Seventy-eight per cent of India's exports are through the MSME sector, Gadkari noted during his remarks. He also highlighted that the sector, which includes six crore companies, accounted for 29 per cent of India's Gross Domestic Product (GDP) and provides employment to 11 crore individuals.
Gadkari also revealed the creation of two different funds for the MSME sector to draw into, a Rs 20,000 crore package for distressed MSMEs and Rs 50,000 crore equity infusion through Fund of Funds.