Concerns Over MSME Classification Changes

Micro and small-scale enterprises are voicing concerns that medium to large industries might exploit schemes intended for smaller players. The Union government's 2025-26 budget revision, which reclassified companies with turnovers up to Rs 500 crore as MSMEs, has sparked this debate.

Impact on Funding and Support

C K Mohan, president of the Tamil Nadu Small and Tiny Industries Association (TANSTIA), highlighted that MSME benefits and bank credits could be diverted to medium and large enterprises. He emphasized that over 90% of MSMEs, with turnovers below Rs 3 crore, would be adversely affected.

Government's Role and Industry's Response

S Vasudevan of TANSTIA suggested that the government should mandate guaranteed and hybrid loans for SMEs. He also welcomed duty rationalization for industrial goods and export promotion facilitation. V K Girish Pandian, president of the Industrial Estate Manufacturers Association (IEMA), Guindy, noted the positive impact of introducing credit cards for MSMEs and enhancing credit guarantees.

Looking Forward

R Ramamurthy, past president of Codissia, believes the reclassification will aid MSMEs in upgrading machinery and scaling up their business. The industry awaits real-time updates on Budget 2025 and Income Tax Slabs, hopeful for a balanced approach that supports all sectors equally.