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New law for SMEs from Oct 2
September, 30th 2006
The new law for the small and medium enterprises will come into force on October 2, the Government announced on Friday. The Micro, Small & Medium Enterprises Development Act 2006 envisages dispensing the two-stage registration process of micro and small enterprises. The legal provisions to check delayed payments to these enterprises has been strengthened with the payment period for buyers reduced to 45 days, and the rate of interest on outstanding amount increased to three times the prevailing bank rate of RBI, compounded on monthly basis. Announcing the date here, Mr Anupam Dasgupta, Secretary, Ministry of Small-Scale Industries, said, "A promotional package for these enterprises will be announced next month after approval by the Cabinet Committee on Economic Affairs". Under the new law, the State Governments will be asked to constitute facilitation councils for micro and small enterprises, and no appeal against the order of the council will be entertained by any court without deposit of 75 per cent of the decreed amount payable by the buyer.
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