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Desist from passing the MSME Amendment Bill: Swadeshi Jagran Manch

Representatives of the bodies also flayed the Economic Survey for stating that small firms find it difficult to sustain jobs they create while large firms create permanent jobs in larger numbers.

, ET Bureau|
Nov 15, 2019, 02.08 PM IST
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“Nowhere in the world we find the definition of MSMEs based purely on turnover, except for a few areas in the US,” said Ashwini Mahajan, national co-convenor, Swadeshi Jagran Manch.
NEW DELHI: Desist from passing the Micro, Small and Medium Enterprises (Amendment) Bill, the Swadeshi Jagran Manch and Laghu Udyog Bharati, economic units of the Rashtriya Swayamsevak Sangh, urged the government on Thursday.

Encouraged by the government’s decision not to join the Regional Comprehensive Economic Partnership (RCEP), which they had campaigned against, the two bodies said ahead of the Parliament session that the bill, which seeks to change the definition of ‘micro’, ‘small’ and ‘medium’ enterprises, would ruin the government’s Make in India programme and reduce Indian traders to mere “assembly unit makers” for overseas firms.

Representatives of the bodies also flayed the Economic Survey for stating that small firms find it difficult to sustain jobs they create while large firms create permanent jobs in larger numbers.

Earlier this year, the Centre decided to revise the definition of MSMEs on the basis of turnover instead of the existing methodology of classifying them as per cost of plant and machinery. The bill is expected to be introduced in the winter session of Parliament, which is scheduled to begin on November 18.

The amendments, according to officials, were proposed so as to allow enterprises to invest as much as they want to modernise their plants without the apprehensions of being denied incentives that come with the ‘small’ or ‘medium’ tag. However, the swadeshi lobby said that this will only harm the sector.

Laghu Udyog Bharati’s national general secretary Govind Lele said several changes, including removing reservations for the small sector enterprises, have reduced the potential of the sector. “It is important that micro and small industry not only get protected and promoted but also preferred in the national economic and industrial policy. It is well known that a stable micro and small industry helps in reducing exodus of rural youth to urban areas and several other social and economic problems.”

The body has demanded that the government formulate a separate micro and small industrial policy and exclude enterprises in the medium sector from the purview of the current MSMED Act, 2006 and make it the Micro and Small Industry Act. “We also think the definition of micro and small industry should be based only on investment in plant and machinery, with those less than Rs 50 lakh classified as micro and those that are more than Rs 50 lakh and less than Rs 5 crore as small,” said Lele.

“Nowhere in the world we find the definition of MSMEs based purely on turnover, except for a few areas in the US,” said Ashwini Mahajan, national co-convenor, Swadeshi Jagran Manch. “Nearly 98 per cent of small units have a turnover of less than Rs 15 crore, which would mean hardly 2 per cent would attain the status of MSMEs at the cost of 98 per cent.

Mahajan said the Economic Survey 2018-19 “insulted” the sector by terming ‘dwarfs’ all perpetually small firms as those with less than 100 workers despite being more than ten years old. “We take offence at the terminology and the suggestions. The government should conduct an enquiry into how this was even published,” he said.

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