Post News Network
Bhubaneswar, Dec 23: The Union government has sought comments and suggestions from state government on the draft micro, small and medium enterprises development (MSMED) Bill-2014.
“Issues related to sickness of MSMEs, non-performing assets and exit policy have been raised from time to time in different quarters. It has been represented that there is no legal framework for re-organisation, winding up or exit for small units leading to huge waste of human resources (promoters and employees), capital (banks and financial institutions) and physical resources (industrial land and buildings, plant, machinery etc).It was proposed to address this issue through MSME Development Act, 2006 by introducing a chapter in the Act,” Union MSME secretary Madhav Lal wrote to Orissa Chief Secretary GC Pati.
The objective of the proposed amendment provides for a framework that will enable MSMEs to seek standard as well as customised relief and concession to revive and tide over difficult financial times.
It also provides an easier and expeditious exit procedure to benefit promoters and guarantors through liquidation and change in management, Lal said in his letter.
Describing the industries as micro, small and medium depending on their investments in plant and machinery as norms set in 2006 under the act, the Union secretary said the ministry is proposing to change the definition by raising the investment amounts.
According to the Centre’s proposal for manufacturing sector, the existing maximum investment for a micro industry is `Rs 25 lakh. It proposed to hike `Rs 50 lakh.
The limit of investment for small industries has been proposed to be raised to `Rs10crore from `Rs 5crore, investment proposed for medium industry is `Rs 30crore (existing `Rs 10crore).
For the service sector, the micro industry’s maximum investment is proposed to be doubled from existing `Rs 10 lakh, for small and medium industry it has been proposed for Rs 5crore (existing Rs 2 crore) and `Rs 15 crore from Rs5 crore, sources said.