Stricter norms on not paying SMEs on time

The provisions of the Small and Medium Enterprises Development Bill, 2005 are being amended to include stricter norms for delayed payments to the small scale sector.

The concept of mirco enterprises is also being included in the Bill. The amendments are in line with the recommendations made by a Parliamentary standing committee and have been referred to a group of ministers headed by Defence Minister Pranab Mukerjee.

"We have included nearly 98 per cent of the recommendations of the committee. Since a vast majority of the enterprises are micro with investments of up to Rs 25 lakh in plant and machinery, the committee has suggested that each clause in the Bill must mention micro, small and medium enterprises," said Anupam Dasgupta, secretary, ministry of small scale industries.

Speaking to reporters, Dasgupta said the committee had also recommended widening the scope of the National Small and Medium Enterprises Board to include micro enterprises.

It had suggested inclusion of promotional measures such as easier procurement and transportation of inputs and final products.

He said the ministry had also circulated a draft proposal for a separate promotional package for the small scale sector.

"The package will focus on measures needed to improve the quality of entrepreneurship through training and technical expertise in addition to the scope for improving infrastructure," he said.

Dasgupta said the ministry would soon operationalise the Rs 100-crore fund for the regeneration of traditional industries.

Clusters would be identified for providing assistance in the form of common testing facilities and market access, he added.

To improve credit availability to the sector, the Small Industries Development Bank of India (SIDBI) along with commercial banks would set up "Small Enterprises Financial Centres" in select clusters for increasing credit delivery and attending to the sector's incipient sickness through financial assistance.

He said the ministry of company affairs had also finalised the first draft of the Limited Liability Partnership Bill which would cover small and medium enterprises.

The Bill would define a limited partnership firm and contain legal provisions to ensure that the liability of the partners is limited to their investments in the firm and does not extend to their personal property or personal investments. New plan

The concept of micro enterprises will be included in the Small and Medium Enterprises Development Bill

A Parliamentary standing committee suggested the inclusion of promotional measures such as easier procurement and transportation of inputs and final products

The ministry of small scale industries also plans to operationalise the Rs 100-crore fund for the regeneration of traditional industries