The government will soon make changes to the definition of a micro, small and medium enterprise, Union Minister Nitin Gadkari said during the Luxury Symposium 2019, and hoped to generate five crore jobs in the MSME sector in five years. Finance Minister Nirmala Sitharaman had in August said the government would consider amending the MSME Act to move towards a single definition. The update in the definition of micro, small and medium enterprises (MSMEs) may allow a single definition for purposes related to taxation, investment, etc. The new definition is likely to be effected through an amendment to the MSME Act and may lead to further improvement in India’s ease of doing business scenario.In February last year, the Union Cabinet had approved amendments to the law to change the criteria for classifying MSMEs from ‘investment in plant and machinery’ to ‘annual turnover’. Observing that MSMEs are the heart of the Indian economy, contributing 29 per cent to the gross domestic product and have created 11 crore jobs till now, the minister said that the government is already in the process of sanctioning 13 clusters under the Solar Vastra scheme and every cluster has a potential of creating 3,000-3,500 jobs.
