Lok Sabha Question No. 328 (UNSTARRED), answered on 2022-02-03
Subject: Definition of MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Ritesh Pandey

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 328 TO BE ANSWERED ON 03.02.2022

## DEFINITION OF MSMEs

## 328. SHRI RITESH PANDEY:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether  the  Government  has  taken  cognizance  of  the  fact  that  the  definition  of MSMEs has been a constraint for many MSMEs to access institutional support;
- (b) if  so,  whether  there  is  any  mechanism,  the  Government  proposes  to  use  to differentiate  MSMEs  from  other  corporate  entities  in  light  of  no  separate  registration  of MSMEs under the companies act;
- (c) whether the Government is considering an increase in the size and extension of the period  of  availability  of  the  emergency  credit  line  mandated  for  providing  collateral-free loans to MSMEs and if so, the details thereof; and
- (d) the number of challenges identified by the Government relating to the MSME sector and the manner in which it proposes to resolve these challenges?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NARAYAN RANE)

(a): Ministry  of  MSME  has  revised  the  classification  of  Micro,  Small  and  Medium Enterprises with effect  from  1 st July 2020  by  notifying the  composite criteria of classification  of  MSMEs  based  on  investment  in  plant  &  machinery  or  equipment  and turnover  of  MSMEs  as  a  structural  change  to  facilitate  existing  entrepreneurs  and  new entrepreneurs.    Government  of  India  has  also    simplified  the  process  of  registration  of MSMEs by replacing the erstwhile system of Udyog Aadhaar Memorandum (UAM) with Udyam Registration (UR) on 1 st July, 2020. UR is free of cost, transparent, online, hassle free  and  is  based  on  self-declaration.  It  does  not  require  any  documents  and  has  an automatic  integration  with  ITR  and  GSTIN.  Ministry  of  MSME  has  also  included 'Wholesale and Retail Trades' under the ambit of MSMEs for the purpose of availing the benefits of Priority Sector Lending.

(b): As  per  their  classification,  MSMEs  can  be  registered  as  Hindu  Undivided  Family (HUF),  Partnership,  Co-operative,  Private  Limited  Company,  Public  Limited  Company, Self Help Group, Society and Trust.

(c): The Emergency Credit Line Guarantee Scheme (ECLGS) was announced as a part of the  Aatma  Nirbhar  Bharat  Package  2020  with  the  objective  to  help  businesses  including MSMEs  to  meet  their  operational  liabilities  and  resume  businesses  in  the  view  of  the distress  caused  by  the  COVID-19 crises.  The  scheme is  under  the  operational  domain  of Ministry of Finance, Department of Financial Services (DFS) and implemented by its nodal agency  National  Credit  Guarantee  Trustee  Company  Limited  (NCGTC),  Mumbai.  The scope of the scheme has already been expanded by including various other sectors in the ECLGS  2.0,  ECLGS  3.0  and  ECLGS  4.0.  The  overall  ceiling  initially  announced  for ECLGS was Rs.  3.00  lakh  crore  which  has  been  subsequently  enhanced  to  Rs  4.5  lakh crore.  The  scheme  was  initially  valid  till  31.10.2020.  It  has  now  been  extended  up  to 31.03.2022 and the last date of disbursement has also been extended up to 30.06.2022.

(d): The Micro and Small Enterprises, generally face the challenges such as 'access to timely and cheap credit', 'access to technology', 'access to proper market' etc. Ministry of MSME has schemes to address these challenges. Ministry of MSME has also launched an Online  Portal  'Champions'  on  01.06.2020  by  Hon'ble  Prime  Minister  for    redressal  of grievances and handholding of MSMEs.

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