Submitted To: Prof. Mehul Ghadiya Submitted By: Riddhi Bhatt Nikita Prajapati Roshni Patel

(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.200 lacs Rs. Small & Medium Enterprisess In accordance with the provision of Micro.10 lacs to Rs.2 lacs Rs. Small and Medium Enterprises (MSME) are classified in two Classes: (a) Manufacturing Enterprises. 1951). 2006 the Micro.5 lacs Upto Rs. as notified.25 lacs to Rs.The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act. vide S. SERVICE MFG.10 lacs Rs.29-09-2006 are as under: Investment SECTOR MFG/SERVICE INVESTMENT IN P & M / Equipments Upto Rs.200 lacs to Rs.500 lacs Rs. The limit for investment in plant and machinery / equipment for manufacturing / service enterprises. SERVICE MFG.25 lacs Rs.O. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.500 lacs to Rs1000 lacs Rs. Small & Medium Enterprises Development (MSMED) Act. 1642(E) dtd.500 lacs MICRO LEVEL-I MFG. SERVICE MFG.5 lacs to Rs.2 lacs to Rs. SERVICE MICRO LEVEL-II SMALL MEDIUM .Definitions of Micro.

Aims & Objectives of MSME: .

marketing.1 million (8%) Number of Rural Enterprises 14. Office of the Development Commissioner (MSME) has recognised the changed environment and is currently focusing on providing support in the fields of credit. also Medium establishment has for the first time been defined in terms of separate Act. toolmenting. technical and managerial consultancy. pollution and energy audits etc. Small and Medium Enterprises(MSME). Global trends and national developments have accentuated Office of the Development Commissioner (MSME)'s role as a catalyst of growth of MSMEs in the country. MSMEs are required to face new challenges. preparation of project and product profiles."Imparting greater vitality and growth impetus to the Micro. Small and Medium Enterprises (MSME) development Act. Many countries of the world have established a SME Development Agency as the nodal agency to coordinate and oversee all Government interventions in respect of the development of this sector. Small and Medium Enterprises (MSME) in terms of output. Office of Development Commissioner (SSI) was established in 1954 on the basis of the recommendations of the Ford Foundation. Micro. Small and Medium Enterprises (MSME) i. Office of the Development Commissioner (MSME) provides economic information services and advises Government in policy formulation for the promotion and development of SSIs. MSME Sector: Profile Quick Estimates of 4th Census (2006-07)  umber of MSMEs 26. it has seen its role evolve into an agency for advocacy. It has over 70 offices and 21 autonomous bodies under its management. These autonomous bodies include Tool Rooms. assistance for exports. Training Institutions and Project-cum-Process Development Centres. 2006 (which has come into force from 02nd Oct. Small and Medium Industrial sector. training for entrepreneurship development. employment and exports and instilling a competitive culture based on heightened technology awareness. governing promotion and development of Micro.3 million Number of Service Enterprises 18.78 lakh . The field offices also work as effective links between the Central and the State Governments. Small and Medium Enterprises (MSME) sector has been recognised as engine of growth all over the world. technology and infrastructure to MSMEs.7 million Per unit employment 6. 2006) the Office of Development Commissioner (Micro. Over the years. hand holding and facilitation for the small industries sector.8 million Number of Women Enterprises 2. In the case of India.e." The Micro.1 million N Number of Manufacturing Enterprises 7.33.2 million (54.4%) Employment 59.24 Per unit fixed investment Rs. Office of the Development Commissioner (MSME) provides a wide spectrum of services to the Micro. Small and Medium Enterprises) functions as the nodal Developmet Agency under the Ministry of Micro. Consequent to the increased globalization of the Indian economy. These include facilities for testing.

Organization Chart: .


Salient Provisions of MSMED Act. etc. Classification of Enterprises. Need to strengthen existing law on delayed payments . Most policies (purchase preference. small and medium enterprises I. Need to simplify registration process . Need for A New Law .To provide for facilitating the promotion and development and enhancing the competitiveness of micro. Other matter concerning SSIs dealt with under multiple laws . 2006 1. SSIs so far dealt with in only two sections of I (D&R) Act.) without statutory basis . registration. 1951 . Need to promote services sector . Section 7(1) Concept of ‘Enterprises’ as against ‘Industries’ Enterprises classified broadly into: . Absence of statutory consultative and recommendatory body . Need for single legislation pointed out by various committees and repeatedly voiced by Industry associations . Need to facilitate closure II. Need to define the MSME concept .

(i) Enterprises engaged in the manufacture / production of goods pertaining to any industry. National Board for Micro . 2 crore Medium Enterprises – investment above Rs.2 crore & up to Rs.25 lakh & up to Rs. 5 crore & up to Rs.10 crore Service enterprises defined in terms of investment in equipment and further classified into:    2. 5 crore Filing of Memoranda by MSMEs Process of two –stage registration of Micro & Small Enterprises dispensed with & replaced by filing memoranda 8 Filing of memoranda optional for all Micro & Small Enterprises Filling of memoranda optional for service sector Medium Enterprises Filing of memoranda mandatory for manufacturing sector Medium Enterprises Apex Consultative Body with Wide Representation of Stakeholders    3. 10 lakh & up to Rs.  Micro Enterprises – investment up to Rs. & (ii) Enterprises engaged in providing / rendering services Manufacturing enterprises defined in terms of Investment in plant and machinery and further classified into:    Micro Enterprises – investment up to Rs. 5 crore Medium Enterprises – investment above Rs. Small and Medium Enterprises (MSME) headed by the Central Minister i/c of MSMEs and consisting of 47 members from among 3  Members of parliament . 25 lakh Small Enterprises – investment above Rs.10 lakh Small Enterprises – investment above Rs.

small and medium enterprises Function of the Advisory Committee: To examine matters referred to it by the National Board. Representatives of Association of MSMEs. To advise Central Government on matters specified in the rules clause 32   . SIDBI.& One representative each of micro. Not more than three representatives of State Governments.           Representatives of Central Ministries Representatives of State Government Representatives of UT administration Representatives of RBI. Advisory Committee headed by central Government Secretary i/c of MSMEs & Including :7(2)    Not more than five officers of the Central Government. Including women Persons of eminence Central Trade Union Organizations National Board to be statutory. NABARD. as against non statutory SSI Board Quarterly meetings of National Board made mandatory Functions of the National Board Examine the factors affecting the promotion and development of MSMEs and review the policles and protrammes of the Central Government in the regard 3 Make recommendation on matters referred to as above or any other matter referred to it by the Central Government Advise the Central Government on the use of Fund/ Funds constituted under section 12   4.

Promotional & Enabling provisions  Central Government to notify programes. produced and provided by MSMEs . one or more Funds for the above-mentioned purposes 12 Central Government to credit to the Fund of Funds such sums as the Government may parliaments by law in this behalf 13 Central Governments to administer the Fund or Funds for purposes mentioned section 9 & coordinate and ensure timely utilization and release of sums with such criteria. by its Ministries . 7.5. compounded on monthly basis   . as may be prescribed 14    6. Procurement preference policies  Central Government of a State Government to notify preference policies In respect of procurement o goods and services. with the aims of: 10    Ensuring smooth credit flow to the MSMEs. Provisions to Check Delayed payments  Provisions related to delayed payment to 14 to 24 micro & small enterprises (MSEs) strengthened 14 to24 Period of payment to MSEs by the buyers reduced to forty five days Rate of interest on outstanding amount Increased to three times the prevailing bank rate of RBI. Minimizing sickness among them. guidelines or instructions for facilitating the promotion and development and enhancing the competitiveness of MSMEs 9 Central Government to constitute. Departments or aided institutions and public sector enterprises (non-statutory till now) 11 8. and Ensuring enhancement of their competitiveness. by notification. Credit The policies and practices in respect of credit to the MSMEs shall e progressive and such as may be specified in the guidelines or Instructions issued by the Reserve Bank of India.

Small and Medium Enterprises (NBMSME) 3. Facilitating Closure of Business  Central Government may (within one year of the commencement of the Act ) notify scheme for facilitating closure of business by a micro.Constitution of NBMSME . Section 14to 24 Provision for Inclusion of one more representative of MSE Association in the Facilitation council Jurisdiction of the Council in a State to cover buyers. Constitution of MSE Facilitation Council (s) mandatory for State Government. 2006 1. wherever they may be located MSE Facilitation Council may utilise the services of any Institution or Center for conciliation and alternate dispute resolution Services Reference made to the Council to be decided within ninety days from the date of reference Disclosure of payments outstanding to MSE supplies mandatory for buyers in their annual accounts Interest (paid of payable to supplier) disallowed to buyer for deduction for Income tax purposes section 14 to 24 No appeal against order of Facilitation Council to be entertained by any Court without deposit of 75% of the decreed amount payable by buyer Appellate Court may order payment of a part of the deposit to the supplier MSE         9.Rules for National Board For Micro. Principal Notification to be issued 2. small or medium enterprise CHECK LIST OF TASKS WITH RESPECT TO THE MSMED ACT.

Notification for the constitution of’ Advisory Committee 8.policies and practices in respect of credit under section 10 12.Notification of the form of the memorandum the procedure of its filing and other matters Incidental thereto 9.4.Notification of the authority with which the memorandum shall be filed by manufacturing medium enterprises 10. 14.DIPP to notify that medium enterprises do not need to file IEM with then 17.Scheme for facilitating closure of business of enterprises. . when required 15. Notification for regions the country 5.Authority for filing memorandum by micro and small enterprises to be notified by States / Uts.Requirement to specify delayed payment with interest in the annual statement of accounts 16.Notification of schemes and programes under section 9 11.Model Rules for the constitution and function of MSEFCs. Notification for classification of enterprises 6.Notification for exclusion of certain items while calculating the cost of plant and machinery under the Explanation 1 of section 7(1) 7.procurement preference policy 13.

Some of the taxes collected from small businesses (as well as corporations and individuals) are actually reinvested into the small-business community in the form of grants and loans. perhaps. so it can be safely asserted that taxes are a major government effect on small business. Grants and Loans 2. in the form of taxes. The government taxation department serves as a figurative double-edged sword to small-business owners: Tax breaks for corporations and business losses seem attractive. The government has a number of effects on the startup and operation of businesses of any size. Business taxes are a complex and intricate subject in which some individuals receive numerous college degrees. Because small businesses account for a large percentage of the .Government Affect Small Businesses: Taxes 1. though they are quickly diminished when the business becomes highly profitable. but the most apparent effect the government has on small business is.

while the owner of a staffing. approval of products and services. Among the most common of these incentives are startup grants. regulating such issues as marketing to children.and old ones are only periodically retired -. and general public welfare. Regulations 3. business owners who suspect their business may be prone to regulation should contact their local and state business licensing contact for specific regulatory is difficult to summarize the entire spectrum of regulations to which any particular business maybe subject. and low-interest government-subsidized loans. . Some government effects actually dictate the terms under which a business may behave. which are particularly potent for nonprofit entities. for example. the effects of government on small business are not exclusively financial. the government entity known as the Small Business Administration offers myriad financial incentives for starting and operating a business.American job market. Because new regulations are passed almost daily -. A small-business owner who runs a restaurant. consulting or other professional service may find the government requires several professional licenses be acquired before the business is allowed to operate. Of course. may find government intrusion in the form of periodic health inspections.

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