?MSMED Act will help promote micro, small-scale industries? | india | Hindustan Times
Today in New Delhi, India
Mar 29, 2017-Wednesday
New Delhi
  • Humidity
  • Wind

?MSMED Act will help promote micro, small-scale industries?

india Updated: Dec 18, 2006 23:34 IST

SMALL INDUSTRIES Service Institute (SISI) on Sunday organised a seminar on ‘The Micro, Small and Medium Enterprise Development (MSMED) Act 2006’ as part of the ongoing national industrial fair – Ind Expo 2006. The Act came into effect from October 2, 2006.

Addressing the seminar, SISI deputy director D S Mandloi said the MSMED Act would go a long way in promoting micro and small-scale industries, particularly those going for expansion and modernisation. “The most relevant feature of the Act is that the definition of micro, small and medium enterprises has been changed”, he said.

The new Act, Mandloi said, provides for the classification of medium-scale enterprises, which was not officially defined until now. “The upper limit for investment in plant and machinery for a manufacturing unit in the small-scale industry has been increased to Rs 5 crore from Rs 1 crore”.

This, he said, will enable slightly bigger industries to reap the benefits that only smaller units used to enjoy. Another major benefit, he said, is that the whole process of starting a new unit has been simplified. “Previously entrepreneurs wanting to start a unit had to get registered with district industries centre (DIC) and submit a project report, but now they just have to fill an entrepreneurial memorandum, which is a simple two-page form”.

Mandloi said it was heartening to note that the new Act underlines the importance of services sector, which is a major contributor not only to the GDP but also to exports.

Mandloi said the government has formed facilitation council in every state to deal with various problems faced by the small industries. “One of the most common problems is the delay in payment by the government enterprises to the vendors,” he said adding, “Now, the purchaser will have to make payment within 45 days or face penalties, and even in case of dispute 75 percent of the funds would have to be deposited with the council”.

Then, there is purchasing preference policy wherein the Central Government departments, public undertakings, government aided institutions, etc., have to purchase 20 percent of their requirement from micro and small-scale industries.
A number of entrepreneurs and government officials took part in the seminar.