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Regarding the government’s move to change the definition of the MSMEs, KASSIA President Basavaraj Javali acknowledged the need for scientific definition of MSMEs , considering the global trends. He said that the industry organisation is aware of how SMEs are classified at the global level, based on the number of employees and the turnover.
Javali added that this is not the case in India, where the capital is scarce small businesses are essentially family-run. Investment in plant and machinery always form the basis. Also, there is paucity in capital. Therefore, in the present circumstances, a simple definition based on investment in plant and machinery has been in vogue. Javali feared that since the proposed definition removes the distinction between manufacture and service, it would have a negative impact on manufacturing, job creation and enterprise development.
Javali also touched upon the aspect of public procurement, saying that the SMEs are entitled to the mandatory share of 20 per cent. However, the definition may well encourage the larger companies to come into the bracket and negatively affect the MSMEs. Thus, KASSiA wants the government to maintain status quo about definition of MSMEs.
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