MSME Registration

Policy Change to bring more startups in medium industry

The government is considering policy changes to broaden and energise one of PM Narendra Modi’s initiatives, Startup India, to include a bigger number of startups under the ‘medium industry’ category that would be eligible for public procurement incentive and preferential benefits.


A medium enterprise as defined in the Micro Small and Medium Enterprises (MSME) Act should have investment of not less than Rs 5 crore and not exceeding Rs 10 crore in equipment if it operates in manufacturing space. In services sector this limit ranges from Rs 2 crore to Rs 5 crore.


This will mean most startups will miss this cut off. Under the action plan, a startup is defined as one having a turnover of more than Rs 25 crore and not be older than five years from incorporation date. In March this year, after Prime Minister Narendra Modi launched the Startup India initiative, the MSME ministry issued an order to all ministries and central public sector units to relax conditions related to prior experience and turnover for startups in all public procurements.


The idea behind this benefit was to provide an equal platform to startups in the manufacturing sector vis-a-vis the established companies and enable startups to participate in such tenders with relaxed eligibility conditions. It is a summarization of an article from Economic times, for more information visit http://economictimes.indiatimes.com/small-biz/startups/policy-changes-to-bring-more-startups-in-medium-industry/articleshow/52720318.cms



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