The Hindu Business Line : Package for micro, small, medium enterprises likely

The Government of India is likely to announce a "policy package of beneficial measures" for the micro, small and medium enterprises (MSMEs) sector within the next one month, according to Mr Jawhar Sircar, Additional Secretary & Development Commissioner (SSI), Ministry of Small Scale Industries, Government of India.

Addressing a meeting organised here by the Centre for Social Markets (CSM) and Federation of Small & Medium Industries (FOSMI) to review the Micro, Small & Medium Enterprises Development Act 2006, Mr Sircar said the first step towards facilitating the promotion and development and enhancing the competitiveness of the MSME sector had been taken with the MSMED Act 2006 coming into force.

Financial Corpus

Following the announcement of the policy package of beneficial measures in the next one month, it was hoped that a financial corpus — Rs 1,000 crore has been asked for — would be made available under the National Manufacturing Competitiveness Programme for providing "purely technological assistance" to MSMEs.

According to Mr Sircar, the Ministry was focused on a "reorientation of its attitude" towards MSMEs in the 11th Five-Year Plan. A set of programmes would be adopted that would mark a move away from incentives and subsidies to assistance-orientation.

Legal Backing

Mr Sircar said that earlier, small and medium enterprises were governed by multiple laws. They had no legal backing except under two sections of the Industrial (Disputes & Regulation) Act 1951. As such, there was a need to have a comprehensive Act that clearly defined the boundaries and contours of the MSME concept.

Hence, the MSMED Act 2006 also seeks to promote services, strengthen delayed payments laws, simplify registration and facilitate closure of units. "This Act provides for a clear exit policy for industry for the first time in India," he said.

Stating that the Act was aimed at facilitating the development of MSMEs — which is the second-largest employer in the production segment in India — Mr Sircar said that "cluster development" was the `mantra' for development in the years ahead.

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