Ministry of Micro, Small and Medium Enterprises
The Micro, Small and Medium Enterprises Development Act, 2006, is a landmark legislation that aims to facilitate the promotion, development, and competitiveness of micro, small, and medium enterprises (MSMEs) in India. It provides a comprehensive framework for the classification of enterprises, credit facilities, procurement preferences, and addresses the issue of delayed payments to MSMEs. The Act seeks to foster growth and sustainability in the MSME sector.
1: Act Background and ministry under which this act is:
The Micro, Small and Medium Enterprises Development Act, 2006, was enacted to facilitate the promotion, development, and enhancement of the competitiveness of micro, small, and medium enterprises. This act falls under the purview of the Ministry of Micro, Small and Medium Enterprises, Government of India.
2: Enactment date, number of chapters, number of sections:
The Act was enacted on 16th June 2006. It is divided into six chapters and has 32 sections.
3: Act Governed By:
The Act is primarily governed by the Ministry of Micro, Small and Medium Enterprises, which frames policies and guidelines for the MSME sector. The National Board for Micro, Small and Medium Enterprises is also a key body established under this Act. State governments and other authorities play a role in implementing the Act at the local level.
4: On Whom it is applicable:
This Act applies to all micro, small, and medium enterprises in India, as well as buyers, suppliers, and other stakeholders involved in transactions with MSMEs. The Act aims to regulate the MSME sector and ensure that these enterprises receive the necessary support and protection.
5: Penalties/Punishments:
The Act prescribes penalties for various offenses, including:
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Contravention of the provisions related to filing a memorandum of enterprise.
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Failure to specify unpaid amounts with interest in annual statements.
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Non-compliance with the provisions of the Act related to delayed payments.
Penalties range from monetary fines to imprisonment, depending on the nature and severity of the offense.
6: Important Pointers:
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The Act provides a framework for the classification of micro, small, and medium enterprises.
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It establishes the National Board for Micro, Small and Medium Enterprises.
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It outlines measures for promoting and developing MSMEs, including credit facilities and procurement preferences.
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The Act addresses the issue of delayed payments to MSMEs and specifies the rate of interest payable on delayed payments.
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It empowers the Central Government to administer funds and provide grants to the MSME sector.
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The Act includes provisions for the establishment of Micro and Small Enterprises Facilitation Councils for dispute resolution.
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It emphasizes the importance of enhancing the competitiveness of MSMEs.
7: Act Copy: