Features of Micro, Small and Medium Enterprises Development Act, 2006

Small and Medium Enterprises Development Bill 2005 (which was presented in the parliament on May 12, 2005) has been approved by the president and thus become an act. This act is named as ‘The Small And Medium Enterprises Development Act, 2006’. This act became effective from Oct. 2006.
Created On: Feb 9, 2018 02:11 IST
Modified On: Feb 9, 2018 02:11 IST
Features of MSME Act-2006
Features of MSME Act-2006

Small and Medium Enterprises Development Bill 2005 (which was presented in the parliament on May 12, 2005) has been approved by the president and thus become an act. This act is named as The Small and Medium Enterprises Development Act, 2006.

Jagranjosh

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Salient Features of Small and Medium Enterprises Development Bill are:

1. It provides the first ever legal framework for recognition of the concept of enterprise and integrating the three tiers of these enterprises i.e. micro, small and medium.

2. Under this act, the enterprises are categorized broadly in two categories i.e. manufacturing and service sector.

3. Defining MSES-MSMED Act, 2006

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved change in the basis of classifying Micro, Small and Medium enterprises from ‘investment in plant & machinery/equipment’ to ‘annual turnover’ in February 2018.

Definition of MSMEs

 

                                              Manufacturing Sector   

Micro enterprises

Annual turnover does not exceed Rs. 5 cr.

Small Enterprises

Annual turnover b/w Rs. 5 cr. To Rs. 75 cr.

Medium Enterprises

Annual turnover b/w Rs. 75 cr. To Rs. 250 cr.


   Service Sector

Micro Enterprises

Annual turnover does not exceed Rs. 5 cr.

Small Enterprises

Annual turnover b/w Rs. 5 cr. To Rs. 75 cr.

Medium Enterprises

Annual turnover b/w Rs. 75 cr. To Rs. 250 cr.

4. Other Features Includes: (a) establishment of specific funds for the promotion and development of competitiveness of these enterprises.(b)  preference in government procurements to products and services of micro and small enterprises (c) simplification of process of closure of business by all three categories of enterprises.

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