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MHA seeks city industrialists’ inputs on implementation of MSMED Act

chandigarh Updated: Aug 20, 2014 10:44 IST
Vinod Kumar

With an aim to resolve the row between Chandigarh administration and industrialists over the issue of implementation of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the union ministry of home affairs (MHA) has asked the industrialists’ body to specify the issues related to the Act which have not been addressed by the administration.

For better “appreciation of the issue”, the ministry has sought inputs from Industries Association of Chandigarh (IAC) following its complaint with the prime minister’s office (PMO) regarding non-implementation of the Act.

The MHA recently asked the administration to give the status report on the implementation of the Act. In reply, filed by joint secretary home MM Sabharwal, the administration claimed that the Act had already been implemented and a facilitation council under the chairmanship of director industries had been constituted to look into the cases of delayed payment pertaining to industries.

Regarding allowing service activities in the Industrial Area, the administration stated that it relates to use of land, which is governed by the local urban planning Act 1952 and building by-laws framed thereunder. Service activities are not allowed by the estate office.

The administration had set up the two phases of industrial area during the 1970s on 147 acres. Plots were originally allotted for manufacturing units, but over the years a large number of allottees used the land for commercial purposes other than manufacturing.

Recently, union home minister Rajnath Singh had also issued directions to the administration for “quick and time-bound” implementation of MSMED Act in Chandigarh for the revival of sick units in the city.


Accusing the administration of misleading the MHA, Industries Association of Chandigarh (IAC) urged the ministry to initiate a high level probe for the delay in implementation of the Act in toto.

Slamming the administration, IAC president Arun Mahajan said that the facilitation council was an administrative small part of the Act and had nothing to do with the implementation of the activities mentioned in the Act.

“Administration is deliberately denying over 2,000 entrepreneurs their rights as given by the Parliament,” rued Mahajan.

When contacted, director industries Satish Kumar Jain said that watching the interest of the city, all the activities mentioned in the Act couldn’t be allowed. “We are in the process of shortlisting a few activities which will be allowed in the Industrial Area,” said Jain.


The Micro, Small and Medium Enterprises Development (MSMED) Act, enacted in 2006 by the central government, is helpful for traders as it allows a wider array of activities on industrial plots besides manufacturing, and without paying any fee for it.

In the Act, the word ‘industry’ has expressly been replaced by ‘enterprises’, in which services along with manufacturing are allowed. Service activities under the Act include sale of motor vehicles, retail sale in non-specialised stores with food etc, retail sale via stalls and markets, hotels and motels, stores, warehousing, hospitals and motion picture projections. Before the Act came into being in 2006, only manufacturing was allowed.