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Capital ceiling to be raised to qualify as micro, small, medium firm
New Delhi: The government has decided to change the definition of what constitute small and medium enterprises, notably by raising the capital caps for qualification, in a bid to revive a sector that is India’s second-largest employer, with a 40 percent share in exports.
A draft bill has already been prepared proposing such revisions, officials said, adding, the cap is proposed to be doubled to Rs.50 lakh for micro enterprises and Rs.10 crore for small-scale firms. For medium enterprises it is proposed at Rs.30 crore from Rs.10 crore, officials said.
“We have not produced global level players in providing services except in information technology and information technology enabled services,” says the draft Micro, Small and Medium Enterprises Bill, 2015, that also has a thrust on Prime Minister Narendra Modi’s ‘Make in India’ initiative.
“India can become a global exporter of services. But with the above exceptions, it has not done so,” it added in its observation on the sector, whose story replicates that of manufacturing in India overall.
According to a senior official in the ministry, the aim of the proposed amendments not only to help revival the enterprises in this category, but also facilitate the exit of some distressed enterprises, aso that investments can be unlocked for more productive use.
“Micro, small and medium enterprises face a lot of insolvency and bankruptcy issues. They must be given legal aid for revival, the ministry official said. “We also need to limit their liabilities and improve the process involved in winding up with affordable mechanism,” he told IANS.
Towards this end, while presenting the Prime Minister Modi government’s first full budget for the next fiscal in February, Finance Minister Arun Jaitely said that a new, comprehensive bankruptcy code on the lines prevailing in the US will make it easier for the exit from unviable ventures.
“We will bring a comprehensive Bankruptcy Code in fiscal 2015-16, that will meet global standards and provide necessary judicial capacity,” Jaitley had said — a move that will replace the laws dealing with sick companies, and the one on industrial and financial reconstruction.
The senior official in the Ministry of Micro, Small and Medium Enterprises said funding was also a major issue for the sector, since banks get wary after loans become distressed, while the high debt-to-equity ratio prevents them from taking further exposures.
Officials said the proposal for a Rs.5-000 crore India Opportunities Venture Fund under the Small Industries Development Bank will go a long way in pumping equity, even as the turnover limit for compulsory tax audit and presumptive taxation was being enhanced from Rs.60 lakh to Rs.1 crore.
Another area being looked at is listing on bourses. The platform for such companies allows does not mandate a compulsory initial public offer. But reflecting their problem with equity funding, there are only a little over 90 such firms listed on the Bombay Stock Exchange.
The micro, small and medium enterprises contribute 8 percent to the country’s GDP, 40 percent of its total exports and around 45 percent of the manufacturing output, as per official data. There are 3.62 crore such firms of which 15.64 are registered. They employ 8.1 crore people.
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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