The Micro, Small & Medium Enterprise Development Act, 2006 : Main Features & Implications

The Parliament of India has enacted the Micro, Small and Medium Enterprises Development Act, 2006. The implications of the various provisions of the Act need to be studied in the backdrop of the general scenario of micro, small and medium enterprises in our State.

The Objective of the MSMED Act

To facilitate the promotion and development of and enhancing the competitiveness of micro, small and medium, enterprises and for matters connected therewith or incidental thereto.

Main Features of the MSMED Act

Constitution of a National Board for Micro, Small and Medium Enterprises to:—

Classification of Enterprises (Principal Trade in First Schedule of IDR Act, 1951)

Nature of Enterprises Manufacturing or production of goods Providing or rendering service
Micro Investment in plant and machinery up to Rs. 25.0 lakhs. Investment in equipment up to Rs. 10.0 lakhs.
Small Investment in plant & machinery above Rs. 25.0 lakhs but not exceeding Rs.5.0 crores. Investment in equipment above Rs. 10.0 lakhs but not exceeding Rs.2.0 crores.
Medium Investment in plant & machinery above Rs. 5.0 crores but not exceeding Rs.10.0 crores. Investment in equipment above Rs. 2.0 crores but not exceeding Rs. 5.0 crores.

Constitution of Advisory Committee at national level to make recommendations:—

Filling of Industrial Entrepreneur's Memorandum.

Measures for promotion, development and enhancement of competitiveness of micro, small and medium enterprises.

Delayed payments to micro and small enterprises.

he Act stipulates that the payments for supplies or services have to be cleared in favour of micro and small enterprises within 45 days of acceptances. The State Government shall, by notification, constitute one or more Micro and Small Enterprises Facilitation Council to monitor the matter of delayed payments

Power to make Rules.