The Micro, Small and Medium Enterprises Development Act 2006 was passed recently by Parliament and has received the assent of our President. The Act has been gazetted also and is now applicable to all the micro, small and medium enterprises of our country. We can differ from the classification of micro, small & medium enterprises given in the bill as also classification for enterprises. We can argue that SSI has a special ?trade name? connotation in India but government seems not to agree to our thinking .We had time and again written that we need not copy the world and make a bill for SME (Small and medium enterprises). SSI in India provides employment besides GNP & exports directly and indirectly. Nowhere in the world we can find such number of small scale industries and as such requires separate bill for their encouragement. Laghu Udyog Bharti has been pursuing this bill/act from a long time. The bill has been passed not exactly in the shape what we desired but still has some positive aspects. Where is number of employees in such units?
The first thing agreed by government is in the formation of National Board for micro and small and medium enterprises. Although we wanted to limit said board for industries of small and micro nature only. But government did not agree and included word enterprises and also included the medium type industries. Nevertheless the board has been agreed upon. The composition of the board is also agreed upon in the Act. Although we feel that only 20 persons are to be taken from various associations and if medium industry and also ?enterprises? to be include we feel we should have bigger representation from various type of association working in the field for the welfare of Industries/enterprises. It is good that industry minister will be ex-officio chairperson of the board. This will create proper atmosphere in the board. The board should not have only a debating and advisory role but also more than that. It should be entrusted to make government binding decisions in the matter of developing small and micro enterprises. Dereservation items list is a point in this case and role of WTO in today'scontext.
We do not comment on the classification of enterprises as done in the Act but would like to see the working in actual practice. We feel that there is lot of scope for improvement in this matter.
Another point agreed in the Act is the formation of advisory committee. Laghu Udyog Bharti welcomes this step and earnestly hopes that this will also strengthen the State level committee already formed and working in some states.
Regarding credit, Laghu Udyog Bharti notes with satisfaction that this matter finds place in the Bill. We only hope that government sets its own house in order. We all know that the bill payments are delayed of those SSI who are dealing/supplying material to government departments particularly power boards etc and get paid on March 30, in the night time so that the money received does not lapse.
Today we find that in the matter of payment there is some improvements in big private sector undertaking but almost no improvement in government sector.
The provision for establishing and reference in case of delayed payment for micro and small enterprises, facilitation council is good.
It is theoretically correct and welcome that the buyer will be liable for interest payment on all the disputed/delayed payment. But the SSI knows how buyers circumvent the same so far. We hope this provision will be put in practice with some teeth in the matter.
We are happy that there is a mention of a special fund for these types of industries in the Act. We note with satisfaction that procurement policy preference is spelt in details. We only wish the procurement policy of government does not blow out in air as in the past.
We still feel that the Board will discuss and remove the practical difficulties being faced by SSI like provision of pollution Board'sno objection, central excise laws, small exporter problems, problem of sickness, modernisation & technology improvement.
We welcome that henceforth getting the permanent registration certificate will not be difficult.
(The author is chairman of Technology Improvement Cell of Laghu Udyog Bharti.)