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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Plea to fix lower turnover to define micro units

The Lagu Udyog Bharati, which is present in 346 districts in the country representing the micro, small and medium-scale enterprises (MSMEs), has urged the government to fix the turnover criteria at Rs. 50 lakh to define micro units.
G. Krithiha, secretary of the Lagu Udyog Bharati, Coimbatore, has said in a press release that according to the new definition by the government, businesses with revenue of Rs. 5 crore will be called micro enterprises, those with sales between Rs. 5 crore and Rs. 75 crore will be identified as small-scale, and units with revenue between Rs. 75 crore and Rs. 250 crore will be medium-sized companies.
Under the new definition, there is no distinction between manufacturing and trading units. Further, by fixing the revenue at Rs. 5 crore for micro units, several industries with less than Rs. 5 crore revenue might not be able to register at all. The turnover of a company keeps changing every year. A firm might do Rs. 4 crore turnover in the first year and Rs. 7 crore the next year. The classification will have to be changed then and this will lead to confusions.
Globally, MSMEs are defined based on turnover and employment and it is 12 years since the previous definition came into force. So, the Lagu Udyog Bharati welcomes the efforts by the government to change the definition. But, it should reduce the minimum revenue for each category, she said.