The government of Uttarakhand has decided to set up a facilitation council — an arbitration tribunal — with quasi-judicial powers. It will decide all disputes arising from unpaid dues of micro and small enterprises for goods or services supplied by them.
The Industries Association of Uttarakhand (IAU), a leading body of SMEs, estimates that there are 100,000 micro and small enterprises (registered and unregistered) in the state, having a total annual turnover of over '500 crore.
These enterprises sell goods like micro bulbs, packaging material, pharmaceuticals and processed foods, which are bought by the government as well as businessmen.
“Nearly 3 to 5 per cent of our payments used to remain blocked. For getting our payments released, there was a long-pending demand for a facilitation council,” said Pankaj Gupta, president of the IAU.
Gupta said the council would have quasi-judicial powers to impose penalties on defaulters. Under the Micro, Small and Medium Enterprises Act, payments must be made within a period of 45 days. If payments are delayed, micro and small enterprises will have the right to move the council in order to settle the account.
Significantly, there will be no appeal against the council’s rulings in the lower courts. Only the high court will have the power to admit pleas against the council, said Gupta. The council will be headed by top officials of the state industries department and representatives of industry.