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Submitted by:Jasleen kaur(242)Madhvi tuli(241)

Richa jain(283)Amanpreet kaur(262)

Jaspreet kaur(244)

Micro, Small and Medium

Enterprises Development Act,2006

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Micro, Small and Medium

Sector

2

Comprises -

50% of Indias total manufactured exports

45% of Indias industrial employment

95% of all industrial units in India

Obstacles

Access to finance/markets

Mistreatment by larger procurement companies Difficult bureaucratic procedures

Lack of management skills

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Objective

3

To provide for facilitating the promotion and

development and enhancing the competitiveness

of micro, small and medium enterprises and for

matters connected therewith or incidental thereto

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Salient features

4

Comprehensive legislation

Industry component replaced by Enterprise

Simplifies registration procedures

Covers service sectors along with the manufacturers.

Constitution of Micro and Small Enterprises

Facilitation Centers by States and UTs

Agenda for specific policies for future Scheme for facilitation of closure of MSMEs

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Overview

Sections Particulars

1 to 2 Preliminary

3 to 6 National Board For Micro, Small And Medium

Enterprises

7 to 8 Classification Of Enterprises, Advisory CommitteeAnd Memorandum Of Micro, Small And Medium

Enterprises

9 to 14 Measures For Promotion, Development And

Enhancement Of Competitiveness Of Micro, Small

And Medium Enterprises

15 to 25 Delayed Payments To Micro And Small

Enterprises

26 to 32 Miscellaneous

5

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Definitions (Sec. 2)

6

(1) Buyer: whoever buys any goods or receives anyservices from a supplier for consideration

(2) Enterprise: an industrial undertaking or abusiness concern or any other establishment, bywhatever name called, engaged in the manufactureor production of goods, in any manner, pertaining toany industry specified in the First Schedule to the

Industries (Development and Regulation) Act, 1951or engaged in providing or rendering of any serviceor services

(3) Goods: every kind of movable property other than

actionable claims and money

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Medium enterprise 2(g)

7

medium enterprise means an enterprise

classified as such under sub-clause (iii) of clause

(a) or sub-clause (iii) of clause (b) of sub-

section(1) of section 7

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Micro enterprise 2(h)

8

micro enterprise means an enterprise classified

as such under sub-clause (i) of clause (a) or sub-

clause (i) of clause (b) of sub-section (1) ofsection 7

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Small enterprise 2(m)

9

small enterprise means an enterprise classified

as such under sub-clause (ii) of clause (a) or sub-

clause (ii) of clause (b) of sub-section (1) of

section 7

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Supplier 2(n)

10

A micro or small enterprise, which has filed a memorandum withthe authority referred to in clause (a) of sub-section (1) ofsection 8, and includes,

(i) the National Small Industries Corporation, being a

company, registered under the Companies Act, 1956(ii) the Small Industries Development Corporation of a State or

a Union territory, by whatever name called, being acompany registered under the Companies Act, 1956;

(iii) any company, cooperative society, society, trust or a body,

by whatever name called, registered or constituted underany law for the time being in force and engaged in sellinggoods produced by micro or small enterprises andrendering services which are provided by such enterprises

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National Board For Micro, Small

and Medium Enterprises

11

Established under Section 3 by CentralGovernment

For playing pro-active role in facilitating andcoordinating the inter institutional linkages amongthe organizations of Central/State Governments

for the growth and development of MSMEs

First met on 20.6.2007 under the Chairmanship ofShri Mahabir Prasad, Union Minister for MSMEs

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ass ca on n erpr ses ec on7(1)

Notification S.O. 1642-E dt. 29.9.2006

12

Manufacturing Enterprises(industry specified in first

Schedule to IDRA Act, 1951Service Enterprises

Micro

Small

Medium

Ceiling on Investmentin Plant & Machinery

Ceiling on Investmentin Equipment

Rs 25 lakh

Rs. 5 crore

Rs. 10 crore

Rs. 10 lakh

Rs. 2 crore

Rs. 5 crore

Section 29B ofIDRA Act applies

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Advisory Committee Section 7(2) to

7(8)

13

Notification No S.O. 1622-E dt. 27.09.2006

Constituted for two years from the date of thenotification

13 members including one Chairperson(Secretary to the Government of India, Ministry ofSmall Scale Industries and Ministry of Agro andRural Industries)

To meet ordinarily, at least once in 3 months Can invite other persons to meetings

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Functions Advisory Committee

14

Recommend the Central Government prior to

classifying any class or classes of enterprises

Examine the matters referred to it by the Board

under section 5 and furnish its recommendations Render advice where called for to

The Central Government on any of the matters specified

in section 9, 10, 11, 12 or 14 of Chapter IV.

The State Government on any of the matters specified inthe rules made under section 30

C id i Ad i C i

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Considerations Advisory Committee

7(8)

15

(a) the level of employment(b) the level of investments in plant and machinery

or equipment

(c) the need of higher investment in plant andmachinery or equipment for technologicalupgradation, employment generation andenhanced competitiveness

(d) the possibility of promoting and diffusingentrepreneurship in micro, small or medium

enterprises(e) the international standards for classification ofsmall and medium enterprises

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Memorandum of MSMEs Section 8(2)

16

Two-stage registration process of SSI substitutedwith optional filing of memorandum with District

Industries Centres (DICs) by all micro and small

enterprises

The form of the memorandum, the procedure of

its filing and other matters incidental thereto shall

be such as may be notified by the Central

Government after obtaining the recommendations

of the Advisory Committee in this behalf

Registration Form

http://localhost/var/www/apps/Abhay%20(Backup)/Data%20E/Data%20E/Sir/Abhay/Lectures/MSME/Registration%20Form.pdfhttp://localhost/var/www/apps/Abhay%20(Backup)/Data%20E/Data%20E/Sir/Abhay/Lectures/MSME/Registration%20Form.pdf

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Where to file?

17

General Manager, District Industries Centre orany District level officer of equivalent rank in theDirectorate or

the Department dealing with Micro, Small andMedium enterprises of the State Government or

Union Territory Administration By a person who intends to establish or has already

established a manufacturing medium enterprise in industry specified in

the First Schedule to IDRA, 1951 Notification S.O. 1636-Edt. 29.9.2006

A medium enterprise for services Notification S.O. 1909-Edt. 7.11.2006

romo on eve opmen an

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romo on, eve opmen anenhancement of competitiveness

measures

18

Section 9

Central Government may specify programmes,

guidelines or instructions by way of

development of skills in the employees, management and entrepreneurs,

provisioning for technological upgradation,

providing marketing assistance or infrastructure facilities

and cluster development of such enterprises

with a view to strengthening backward and forward

linkages

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Credit facilities Section 10

19

Progressive policies and practices to be issued inthe guidelines or instructions issued by theReserve Bank, from time to time, to ensure timely and smooth flow of credit minimise the incidence of sickness

enhance the competitiveness RBI Notifications:

Apr 04, 2007 : Credit flow to Micro, Small and MediumEnterprises Sector

Apr 18, 2007 : Credit flow to Micro, Small and Medium

Enterprises Sector-UCBs Guidelines On Lending To Priority Sector Revised dt.April 30, 2007

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Other measures by Central

Government

20

notify preference policies in respect of

procurement of goods and services, produced

and provided by micro and small enterprises, by

its Ministries or departments, or its aidedinstitutions and public sector enterprises S 11

Constitution of Funds S 12

Credit of grants to the Funds S 13

Administration and utilization of Funds S 14

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Delayed Payments to Micro and

Small Enterprises

21

more effective mechanisms for mitigating the

problems of delayed payments to micro and small

enterprises

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Payments by buyer to supplier

22

Payment to be made on or before the date

agreed upon or appointed day

The period agreed upon between the supplier

and the buyer in writing shall not exceed

forty-five days from the day of acceptance or

the day of deemed acceptance.

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Appointed day S 2(b)

23

the day following immediately after the expiry of15 days from the day of acceptance or the day of

deemed acceptance of any goods or any services

by a buyer from a supplier

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Day of acceptance

24

(a) where no objection is made in writing by thebuyer regarding acceptance of goods orservices within fifteen days from the day of the

delivery of goods or the rendering of services,the day of the actual delivery of goods or therendering of services

(b) where any objection is made in writing by thebuyer regarding acceptance of goods orservices within fifteen days from the day of thedelivery of goods or the rendering of services,the day on which such objection is removed bythe supplier;

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Interest S 16, 17

25

When applicable? Buyer fails to pay as per S. 15

Liability

compound interest with monthly rests to the supplieron that amount from the appointed day or, as thecase may be, from the date immediately followingthe date agreed upon, at three times of the bankrate notified by the Reserve Bank

notwithstanding anything contained in anyagreement between the buyer and the supplier or inany law for the time being in force.

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Micro and Small Enterprises

Facilitation Council Sections 20 & 21

26

To be established by State Governments

Not less than 3 and not more than 5 members

(including chairperson)

The composition of the Micro and Small

Enterprise Facilitation Council, the manner of

filling vacancies of its members and the

procedure to be followed in the discharge of their

functions by the members to be prescribed by

State Governments

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Reference to Micro and Small

Enterprises Facilitation Council S 18

27

Who may refer? any party to a dispute

For what amount?Amount due plus interest

Notwithstanding anything contained in any otherlaw for the time being in force

What will the Council do? itself conduct conciliation in the matter or Refer to any institution or centre providing alternate

dispute resolution services for conducting conciliation(provisions of sections 65 to 81 of the Arbitration andConciliation Act, 1996 to apply as if the conciliation wasinitiated under Part III of that Act).

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Failure of conciliation 18(3)

28

Where the conciliation stands terminated on

failure, the Council shall

itself take up the dispute for arbitration or

refer it to any institution or centre providing alternatedispute resolution services arbitration (provisions of

the Arbitration and Conciliation Act, 1996, to apply

as if the arbitration was in pursuance of an

arbitration agreement referred to in section 7(1) ofthat Act)

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Arbitrator/conciliator

29

Jurisdiction of such Arbitrator/conciliator:

dispute between the supplier located within its

jurisdiction and a buyer located anywhere in India.

Time limit for decision of reference:

90 days from the date of reference

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Application for setting aside decree,

award or other order S. 19

30

Application to a Court

Appellant (not being a supplier) has to deposit75% of the amount in terms of the decree, award

or, other order in the manner directed by suchcourt

The court may order that such percentage of theamount deposited shall be paid to the supplier, asit considers reasonable under the circumstancesof the case subject to such conditions as it deemsnecessary to impose

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Scheme for closure of business S. 25

31

For a micro, small or medium enterprise, not

being a company registered under the

Companies Act, 1956

Scheme to be notified by the Central Government

within one year from the date of commencement

of this Act

To facilitate closure of business

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Policy for Closure of business

32

To ensure

To ensure that inefficient investment is directed to

more efficient businesses

Prevent mismanagement and irresponsiblepractices

Set priorities on closure amongst

Owners

Employees Other Stakeholders

No policy notified till date

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Penalties

33

Whoever intentionally contravenes or attempts to contraveneor abets the contravention of any of the provisions containedin sub-section (1) of section 8 or sub-section (2) of section 26shall be punishable in the case of the first conviction, with fine which may extend

to rupees one thousand; and in the case of any second or subsequent conviction, with fine

which shall not be less than rupees one thousand but mayextend to rupees ten thousand

Where a buyer contravenes the provisions of section 22, heshall be punishable with a fine which shall not be less than

rupees ten thousand No court inferior to that of a Metropolitan Magistrate or a

Magistrate of the first class shall try any offence punishableunder this Act

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Areas that need government

intervention

34

Tiny, small and medium enterprises should have

their own separate priority packages of financing

lest the tiniest are not elbowed out by the biggest

Create separate capital markets for these sectors.

Encourage better labor practices

Promote woman entrepreneurship

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THANK YOU