Ministry of MSME constitutes Working Group to suggest changes in MSMED Act
New Delhi, Jan 11 (KNN) After fourteen years, the Micro Small and Medium Enterprises Development Act 2006 may undergo a major revamp.
According to Office Memo issued by Office of Development Commissioner under Ministry of MSME on 8th Jan 2020, a Working Group has been constituted under chairmanship of Surendra Nath Tripathi, Director, Indian Institute of Public Administration (IIPA). Tripathi- a former officer of Indian Administrative Services, headed Office of DCMSME as Additional Secretary earlier and is conversant with issues confronting MSMEs.
The Working Group is ‘tasked to conduct necessary study and recommend modifications that are required in the MSME (Development) Act, 2006 in order to ensure ease of doing business and sustainable growth & development of MSMEs’.
The prominent members of the Working Group include Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME), Harsh Shrivastava- CEO, Micro Finance Institutions, Prashant Girbane, Director General, Mahratta Chamber of Commerce, Industries & Agriculture among others.
MSME associations have been demanding changes in MSMED Act.
“Some of key provisions in the Act related to delayed payments and public procurement need to be strengthened based on the experience of last 14 years” says FISME’s Anil Bhardwaj.
The MSMED Act is the cornerstone legislation for MSMEs in India. It provides for ‘facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises’.
It provides the definition of MSMEs in India currently on the basis of investment in plant and machinery (excluding investment in land and building) for manufacturing and service enterprises separately.
The current thresholds of investments for manufacturing are: Micro up to 25 lac, Small up to 5 crore and Medium upto 10 crore. Corresponding thresholds for service enterprises are: Micro 10 lac, Small 2 crore and Medium 5 crore.
Although the Cabinet had cleared replacement of investment based definition with one based on turnover, yet the Act could not be amended through the Parliament. The Working group may also look into change in criteria of definition. (KNN Bureau)