MSMED Act 2006 will boost SMEs: CII

New Delhi, July 30 (UNI) The operating environment for the small and medium enterprises (SMEs) will have a very positive impact on he growth and development of the sector, industry Chamber CII sadi in its report on the Pre vis-a-vis the Post enactment of the MSMED Act, 2006.

However, CII has identified areas such as establishment of an apex statutory body, introduction of the concept of an enterprise, classification of enterprises, establishment procedure, procurement policiesetc, for facilitating credit for the SMEs that would lead the process of improvement of the operating environment.

Regarding the apex statutory body, clause 3 of the MSMED Act 2006 provides for the establishment of National Small and Medium Enterprises Board. Hence, it is now a statutory body, that will mandatorily have quarterly meetings.

The study highlighted the clause 25 of the MSMED Act 2006, providing that the Center may, within one year of the commencement of the Act, notify a scheme for facilitating closure of business by a micro, small or medium enterprise.

Introducing the concept of enterprises against industries, clause 7(1) of the MSMED Act 2006 classifies enterprises as engaged in manufacture or production of goods pertaining to any industry; and those engaged in providing or rendering services.

Earlier, there existed only the concept of industries ioe the (SSI). This clause also provides the classification of enterprises into Micro, Small and Medium units.

Clause 15 provides for the period of repayment by the supplier as 45 days as against the earlier 120 days.

Now, under the clause 8 of the Act, the earlier two stage registration process of Micro and Small industry will be dispensed with and replaced by filing of memoranda.

However, the filing of memoranda is optional for Micro and Small enterprises in manufacturing and services sector, for Medium enterprises in services sector but mandatory for Medium enterprises in manufacturing sector.

While, the clause 11 of the Act provides for the notification of preference policies, by the Central or a state government in terms of procurement of goods and services.

The clause 10 provides that the policies and practices in respect of credit to the MSMEs shall be progressive and such as may be specified in the guidelines or instructions issued by the RBI.

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