A single comprehensive
act for development and regulation of small enterprises
had been a long outstanding demand of the Sector so as
to free it from a plethora of laws and regulations and
visit of inspectors, which it had to face with limited
awareness and resources. The need has been emphasized
from time to time by stake holders at different fora.
In addition, recommendations to provide for a proper legal
framework for small sector to relieve it of the requirements
to comply with multiple rules and regulations were made
by the Committees such as the Abid Hussain Committee (1997)
and Study Group under Dr. S.P. Gupta (2000). While the
small scale industries continued to be important for the
economy, in the recent years the small scale services
have also emerged as a significant sector contributing
substantially to the economy and employing millions of
workers. Therefore, it became necessary, as is the practice
worldwide, to address the concerns of both the small scale
industries and services together and recognize them as
small enterprises. The worldwide as a composite sector.
In a fast growing economy like ours, the natural mobility
of small enterprises to medium ones has to be facilitated
through appropriate policy interventions and legal framework.
With these objectives in view, the Government came with
an exclusive legislation for micro, small and medium enterprises
known as the Micro, Small and Medium Enterprises Development
Act, 2006.
The
Different provisions under MSMED Act-2006, which protects
the MSME sector, are as under :-
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