Background Note on the Micro, Small and Medium Enterprise Development Act 2006
Abstract:
The micro, small and medium enterprises sector comprises 50% o f India’ s total manufactured exports , 45% o f India’s industrial employment , and 95% of all industrial unit s in the country . Despite its importance, the MSME sector has long faced extreme obstacles in accessing finance and markets . Some of these obstacles include inability t o access finance and working capital loans from banks, inability to access capital from other sources, mistreatment by larger procurement companies, difficult bureaucratic procedures for registration, and lack of management skills.
The Government of India pas sed in June 2006 an act regarding the Micro, Small, and Medium Enterprises . The Micro, Small and Medium Enterprise Development Ac t 2006 (MSMEDA) was the product of a consultative process involving over 300 industry associations, government bodies , and multiple stakeholders across India. The Act accomplishes many long- standing goals of the government and stakeholders in the MSME sector.
Ethics for SMEs
-Contributed by Kanak Dutta, Knowledge Buddy
Business ethics set the standard for how your business is conducted. They define the value system of how you operate in the marketplace and within your business. With legal scandals concerning insider trading and employee theft making the news, it is no wonder that businesses are increasingly giving attention to the ethical basis of their business and how to lead in an ethical way. While the examples above seem to be clear-cut breaches of ethics, many ethical dilemmas that are not so clear-cut are faced on a daily basis in business. In fact, there may not even be a “right” or “wrong” answer to the dilemma, but how you deal with it will says much about you and your business.
These decisions are often referred to as being in the “gray” area. They are not black-or-white, but could be argued appropriately either way.
Importance of Business Ethics in your company
Why is it difficult to approach Government
- Contributed by Tapan Bhatnagar
As a Senior Minister recently stated during an International conference, “Approaching the Government is for help is like asking for a Kiss of Death”, but what I fail to understand is Why is it that the Government which is Of the People, By the People and For The People portrayed in such a Mafioso style.
Though there can be many reason for this the two reasons I can attribute to this is Corruption and Red Tape. Let me talk from a personal perspective for each of the reasons I have stated.
Special regime for SMEs in new companies’ Bill
Small companies will now get a say in the corporate sector. The new Companies Bill, 2008 will for the first time define what makes a small enterprise. The bill is up for approval in the coming parliament session.
A small company shall be defined as a company which satisfies three conditions—it should not have a paid-up share capital and a turn-over beyond a specified limit, the company should not be regulated by any sectoral regulator and it should not hold any subsidiary company.
According to the first condition, the company should not have a paid-up share capital and a turnover beyond a specified limit. The limit is to be notified later on by the central government. According to Micro, Small and Medium Enterprises Development Act, 2006, a small enterprise is one having an investment of more than Rs 25 lakh but less than Rs 5 crore if it is dealing in the production of goods whereas if the enterprise is dealing in the rendering of services then the investment in equipment should be more than ten lakh rupees but should not exceed the limit of two crore.
