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National MSME Board meeting to discuss long awaited enhancement in the ceiling on investment in MSMEs

 New Delhi, Apr 18 (KNN) The 15th meeting of the National Board for Micro, Small and Medium Enterprises (MSMEs) will be held on April 27, 2017 during which discussions over newly released MSME Policy Report and Public Procurement Policy will be held.

The meeting, to be held under the chairmanship of Union MSME Minister Kalraj Mishra, will be attended by Chief Ministers of select states and Secretaries of the Government. Chiefs of industry bodies including FISME, COWE, DICCI, TANSTIA, Laghu Udyog Bharati etc. are members of the Board.

The main agenda of the 15th meeting  are  the  One Man Committee Report on MSME Policy; implementation of Public Procurement Policy, 2012 including procurement by Defence PSUs and crucial  discussions on the long awaited amendments in MSMED Act, 2006.

The Public Procurement Policy for MSEs which was implemented on April 1, 2012 and was made mandatory from April 1, 2015 aims to promote and develop MSEs by supporting them in marketing of products produced and services rendered by them.

Under the Policy, every Central Ministry/ Department, Central PSUs shall set an annual target for 20 per cent procurement from the MSEs. A sub-target of 4 per cent out of 20 per cent target of annual procurement earmarked for procurement from MSEs owned by SC/ STs.

The Ministry is now looking for amendments to this policy order. The Ministry is considering that besides Government departments and CPSUs, this should be explicitly made applicable to all statutory and autonomous bodies and other societies and trusts owned by Government of India.

The Ministry has also formed a Committee to look into the  list of 358 items reserved for procurement from MSMEs and revise the nomenclature for clarity.

The National Board will also take up the long awaited  Amendment in the Micro, Small and Medium Enterprises Act, 2006.

The MSMED (Amendment) Bill was introduced in the Parliament in 2015 after due consultation with the stakeholders primarily  for enhancement of investment limit in Plant & Machinery (for manufacturing) and Equipment (for services).

Subsequently, the Ministry of MSME had set up a One Man Committee with Prabhat Kumar, former Cabinet Secretary, Government of India and also former Governor, Jharkhand as Chairman to make appropriate recommendations for a National Policy on MSMEs.

In its report submitted on  January 27 this year, the Committee has not found it worthwhile  the two suggested bases of redefining the MSMEs, i.e. turnover and employment.

However, the Committee suggested enhancement in the existing ceiling on investment in plant and machinery.

The proposed investment limits for manufacturing units are

For Micro - Up to Rs.50 lakh; For Small - Above Rs. 50 lakh Up to Rs.7 Crore; and For Medium above Rs. 7 Crore Up to Rs.25 Crore.

While the proposed investment limits for services units are

For micro- Up to Rs.25 lakh; for Small - Above Rs. 25 lakh & Up to Rs.4 Crore; and for Medium - Above Rs. 4 Crore & Up to Rs.15 Crore.

The Committee also recommended that the Central Government may be empowered to change he investment limits for Micro, Small and Medium enterprises from time to time instead of being forced to go to the Parliament.

Prabhat Kumar has also suggested that in order accord the importance the MSME sector deserves, it is imperative to create an apex authority under the chairmanship of the Prime Minister. The Authority may be called the National MSME Authority.

Along with the new agendas, the National Board will also review developments and progress of points discussed during the last meeting. (KNN Bureau)