New Delhi, Apr 12 (KNN) The Ministry of Micro, Small and Medium Enterprises (MoMSME) today release the Report of the One Man Committee constituted to make recommendations for a National Policy for MSMEs.

The Committee was chaired by Prabhat Kumar, Ex-Cabinet Secretary and Ex-Governor Jharkhand.

The Report recommended that in order to accord the importance the MSME sector deserves, it is imperative to create an apex authority under the chairmanship of the Prime Minister.

It proposed that the Authority may be called the National MSME Authority and it should be serviced by the Cabinet Secretariat and should comprise of the ministers of all concerned ministries like Ministry of MSME, Ministry of Finance, Ministry of Corporate Affairs, Department of Legal Affairs, DIPP, Ministry of Labour & Employment, Ministry of Textiles, Ministry of Food Processing Industries, Ministry of Chemicals & Fertilizers and Department of IT & Electronics etc.

There may also be a representation of the Niti Aayog in the Authority, the report recommended.

The report suggested that the present MSME Board can be utilized to advise the Authority in it's day to day functioning while the Authority may be involved in functions such as - providing a common platform to oversee the policymaking for MSMEs pertaining to different Ministries/Departments; evaluating the schemes and programmes of the Ministries wherein the MSME sector is affected directly or indirectly, making a periodic review of the functioning of the MSME sector etc.

The Report pressed that it will also be desirable to have an institutional forum for constant consultation between Centre and the States. Furthermore, an advisory service should to be launched by the Central Government on important issues and developmental programmes relating to MSMEs.

On Legal issues, the Report highlights that at present the MSMED Act 2006 revolves around the MSME Board.

The Committee feels that though the MSME Board has met many times since its inception, its actual involvement in the policy formulation has been far from satisfactory. Similarly, as per the Act an Advisory Committee has been constituted as an advisory body to the MSME Board. But in actual practice, very little utilization of the Advisory Committee has been made by the Board in guiding MSME policy.

The Committee proposed an overhaul of the institutional policy making arrangement for MSMEs by creating an overarching body under the chairmanship of the Prime Minister, with the secretariat for this body being placed within the Cabinet Secretariat.

“In this changed scenario, still there will be a role for the MSME Board that of actively advising the overarching body in the matters related to the functioning of the MSME sector. Therefore, there will be no need of an Advisory Committee with duplicating terms of reference,” the Committee said recommending abolition of the Advisory Committee from the MSMED Act 2006.

Further, the Report stated that the MSMED Act, 2006 (Act of 2006) and the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act. 1993 (Act of 1993) are Special Acts.

“Hence, these should supersede all earlier Special Acts. But according to various decisions of High Courts and Supreme Court, some earlier Special Acts like Limitation Act, 1963, the Sick Industrial Companies (Special Provisions) Act, 1985, etc. supersede the Act of 2006. MSME Ministry have given affidavits in Courts that this Special Act of 1993 supersedes earlier Special Act like Limitation Act, 1993. Hence, it is urged that a section should be included in the Act of 2006 that this Act supersedes all earlier Special Acts,” the Committee recommended.

The Committee said Penalty, Price variation, Earnest money and Security deposit should also be covered and MSME Facilitation Council should be authorized to order refund and give interest on these, if delay has taken place in any case under this Act.

At present, there is a multitude of labour related Acts (16 to be precise) which give rise to unwanted inspector raj.

Such a situation has led to the harassment of MSE entrepreneurs and has given rise to rent seeking behaviour, Prabhat Kumar Report said.

Prime Minister's Task Force had strongly suggested passing the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Amendment Bill. Further, the Task Force had recommended the Ministry of Labour & Employment and Ministry of MSME to jointly examine the feasibility and desirability of separate legislation (single and comprehensive) for MSE sector.

The Committee said it has been informed that the discussions are still on towards this respect. It has urged that the discussions should gather pace and culminates into a positive outcome for the benefit of the MSE Sector. (KNN Bureau)