A recently released survey by the PHD Chamber of Commerce and Industry (PHDCCI) has revealed that a major section of North India-based SMEs feel they should be categorised on the basis of their turnover instead of their investment.

However, speaking to a Bizxchange correspondent Maganbhai H Patel, president of the Gujarat State Small Industries Federation, said that classification of SMEs according to investment is usually more accurate. “It is always better to classify SMEs as small or medium depending upon their investment in fixed assets such as plant and machinery because an SME’s capacity to invest in more fixed assets shows its total capacity and size,” he said.

Meanwhile, some SMEs in South India have agreed with their counterparts in northern India that an SME should be classified according to its annual turnover.

“It will be more accurate to categorise an SME as per its turnover because the turnover reflects the sales of an unit. Sales are the real indicators of an SME’s size and ability,” said Rajan Ramasamy, owner of Lara Corporation, a mid-sized unit in Madurai which supplies and exports poultry and agro products.

Almost 68% of SMEs that participated in the PHDCCI study, which was conducted on SMEs hailing from states such as Uttar Pradesh, Haryana, Punjab, Rajasthan, Madhya Pradesh and Himachal Pradesh, among others, expressed their eagerness in expanding business operations provided the government supported them with an enabling policy environment.