Small and Medium Enterprises Development Bill, 2005
Introduction
The Small and Medium Enterprises Development Bill, 2005, was a significant legislative effort aimed at promoting and developing small and medium enterprises (SMEs) in India. Introduced in the Lok Sabha on May 12, 2005, the Bill sought to address various challenges faced by SMEs and enhance their competitiveness in the market.
Key Objectives of the Bill
- Classify Enterprises
- Empower Governments
- Streamline Inspection Procedures
- Address Delayed Payments
Classification of Enterprises
The Bill proposed the following classification for enterprises:
- Small Enterprises: Enterprises with an investment in plant and machinery up to ₹5 crores for manufacturing or production of goods, and up to ₹2 crores for services.
- Medium Enterprises: Enterprises with an investment in plant and machinery between ₹5 crores and ₹10 crores for manufacturing or production of goods, and between ₹2 crores and ₹5 crores for services.
Establishment of the National Small and Medium Enterprises Board
One of the significant provisions of the Bill was the establishment of the National Small and Medium Enterprises Board. This board was tasked with making recommendations to the central government on policies and programs for the development of SMEs. The board consisted of ministers and secretaries from specified central and state ministries, chairpersons of specified entities, an RBI officer, ten members from associations of small enterprises, and experts from the fields of economics and industry.
Measures to Promote SMEs
The Bill outlined several measures to promote the growth and development of SMEs, including:
- Skill Development Programs
- Marketing Assistance
- Infrastructure Facilities
- Credit Facilities
- Preference Policies
Repeal of Previous Legislation
The SME Development Bill, 2005, also repealed the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. This was done to streamline the legislative framework and provide a more comprehensive approach to addressing the issues faced by SMEs.
Conclusion
The Small and Medium Enterprises Development Bill, 2005, was a landmark piece of legislation aimed at fostering the growth and development of SMEs in India. By providing a clear classification of enterprises, empowering governments, streamlining inspection procedures, and addressing delayed payments, the Bill sought to create a more conducive environment for SMEs to thrive. The establishment of the National Small and Medium Enterprises Board and the various measures outlined in the Bill further underscored the government's commitment to supporting this vital sector of the economy.
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