Cabinet Decides To Redefine MSMEs – Defence Sector To Benefit


A seminal decision taken by the Union Cabinet in early February 2018 to change the basis of classification of the Micro, Small and Medium Enterprises (MSMEs) bodes well for this important segment of India’s industrial base. The decision will become effective after the bill to amend the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act 2006) is approved by Parliament and assented to by the President of India.

According to the Committee of Experts set up by the Ministry of Defence (MoD) in 2015, MSMEs contributed 7.04 per cent to the Gross Domestic Product (GDP) in 2012-13, with a gross value of output of Rs 1,09,976 crore. In the defence sector alone, as many as 6,000 MSME units have been supplying components and sub-assemblies to the public and private sector companies, out of which 800 are engaged with the Defence Research and Development Organisation (DRDO).

Presently, enterprises qualify as micro, small or medium enterprises if their investment in plant and machinery (for manufacturing units) and equipment (for service providers) is within the limits laid down in Section 7 of the MSMED Act 2006 Read More…

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