The Indian government has decided to change the definition of what constitute small and medium enterprise (SME), 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.