Skill, labour, talent for MSMEs: From the previous definition based solely on investment up to Rs 10 crore in plant and machinery, the new definition was notified on June 1, 2020, to cover enterprises with turnover up to Rs 250 crore and investment up to Rs 50 crore under the MSME ambit.
Skill, labour, talent for MSMEs: Three years after the government revised the MSME definition to include turnover along with investment in plant and machinery as a composite criterion, MSMEs under the new definition have reported employing more than 12 crore people so far, according to the official data. From the previous definition based solely on investment up to Rs 10 crore in plant and machinery, the new definition was notified on June 1, 2020, to cover enterprises with turnover up to Rs 250 crore and investment up to Rs 50 crore under the MSME ambit.
As of June 18, 1.99 crore MSMEs — including new registrations and those who migrated from the erstwhile MSME registration portal Udyog Aadhaar – were registered under the revised definition on the Udyam portal. This also included 30.93 lakh self-employed or micro enterprises such as street vendors which were earlier informal in nature and not covered under the Goods and Services Tax (GST) regime or exempted under the CGST Act, 2017.
Out of 12.04 crore jobs reported by units registered on the Udyam portal since the revision of MSME definition as a post-Covid support measure by the government, 11.73 crore people including 2.83 crore women were employed in 1.68 crore MSMEs while 30.93 lakh were self-employed units, data from the portal showed.
To boost job creation among MSMEs and particularly the informal micro units by bringing them into the formal economic fold, the government had launched a formalisation project called Udyam Assist Platform (UAP) in January this year. Through UAP, banks collate data around the transaction history of such units and share the data with the Udyam portal for registration of informal units to make them eligible for various MSME schemes by the government.
Importantly, in May this year, the Reserve Bank of India (RBI) informed all financial institutions including banks and NBFCs to treat informal micro enterprises registered on the Udyam portal as micro enterprises for classification under the priority sector lending (PSL) norms.
Notably, due to Covid impact, 63,248 people working in the MSME sector had lost their jobs between July 1, 2020, and July 20, 2022, as per data shared by the minister of state in the MSME Ministry Bhanu Pratap Singh Verma in the Rajya Sabha in July last year. This included 19,862 jobs lost in FY21, 42,662 in FY22, and 724 till July FY23.