New MSME policy to roll out in 30 days

The Central government proposes to roll out the new policy for the micro, small and medium enterprise (MSME) sector in the next 30 days, according to Kalraj Mishra, the Union minister for MSMEs. Until now the sector has been governed by the industrial policy in force, and does not have a policy of its own.

“As per stipulation of the new policy, the general procedures as well as procurement procedures would be vastly simplified and all clearances for setting up of micro and small businesses would be accorded online within a fixed period of 15 days,” Mishra said at a function in New Delhi, without elaborating further.

The Budget speech of Finance Minister Arun Jaitley had proposed to “redefine” MSME sector activity, and the new policy is being chalked out by a select committee formed with officials from the Reserve Bank of India (RBI), ministry of finance and the MSME ministry.

Apart from simplifying general procedures and procurement, the new policy will also simplify the registration of MSMEs.

The new MSME policy will primarily seek to redefine the sector in terms of annual turnover, capital employed and labour engaged at the factory. It will also look at tweaking the RBI’s guidelines for treating non-performing assets in the MSME sector.

State-specific policies have been examined in the effort to devise a national MSME policy.

The ministry has held meetings with representatives of 80 associations in Delhi and sought their suggestions on a draft policy.

The policy will also reaffirm the existing mandatory procurement of MSME-originated products by public sector units (PSUs).

According to the MSME ministry, the new policy will make it compulsory for PSUs to procure 20 per cent of their need-based products from MSMEs, including four per cent from small industry units operated by women entrepreneurs.

The Central government has been making efforts at skill development, addressing issues related to loan sanction for micro industries and improving governance by implementing an e-governance system.

Currently, those who want to start new enterprises have to obtain ‘no objection certificates’ (NOCs) from various departments. The MSME ministry is now putting in place a mechanism to simplify the process of obtaining NOCs and ensure that they are given in a time-bound manner.

SOURCE: Business Standard