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MSMED Act on paper alone

chandigarh Updated: Oct 26, 2012 00:31 IST
Vinod Kumar
Vinod Kumar
Hindustan Times
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It's been more than six year since the much publicised Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, was enacted by the government, but the UT administration is yet to implement the same.

The Act was formulated with an aim to facilitate the promotion and development and enhancing the competitiveness of micro, small and medium enterprises. The industries association of Chandigarh has given numerous representations to the administration and central government for enactment of the Act, but in vain.

In May this year, following a representation of the association, Virbhadra Singh, the then minister of micro, small and medium enterprises had asked the UT administration to implement the various provisions of the MSMED Act in letter and spirit and allow service activities along with manufacturing activities in Industrial Area.

Interestingly, in a reply given to the association under Right to Information Act (RTI), the administration has accepted that the MSMED Act is applicable to Chandigarh with effect from October 2, 2006.

Before the MSMED Act 2006 came into being, only manufacturing was allowed in industries. However, with the MSMED Act coming into force, the word industry was replaced by enterprises in which services along with manufacturing was allowed. Services activities under the Act include sale of motor vehicle, retail sale in non-specialised stores with food etc, retail sale via stalls and markets, hotels and motels, store, warehousing, hospitals and motion picture projections.

Coming down heavily on the UT administration, Industries Association of Chandigarh president Arun Mahajan said the administration has been imposing exorbitant conversion charges from 2005 to 2008 for change over to the above services that are defined as service activities under the Act despite the fact that Act came into force in 2006. Terming the conversion policy as a mistake, Mahajan asserted that the administration should have withdrawn the policy as soon as the MSMED Act came into being and urged the authorities for implementation.

HS Mamik, city-based industrialist, who has been at loggerheads with the authorities over the issue, said: "Chandigarh administration is in confrontation with the Indian Parliament, as they refuse to implement the Act in letter and spirit as desired by it."

When contacted, UT home secretary-cum-secretary industries Anil Kumar said that the Act is in place, but the decision pertaining to its implementation is to be taken by UT estate office.