Let’s make this Act work

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 that became operational from yesterday, is a turning point for the development of Indian industry.

The Act will not only address and streamline several issues being faced by the micro, small & medium industries, but also answer other key governance and operational concerns.

I believe the Act’s provisions relating to inspector visits, labour laws that have been interfering with the daily operations and have long been major irritants will soon be things of the past.

Even the measures to check delayed payments and encourage flow of credit by banks and other financial institutions to these micro, small & medium industries cannot be overlooked.

Of all the positive elements in the act what impresses me most is the proposal to define the medium enterprises segment at par with the existing concept of Small and Medium Enterprises (SMEs) worldwide. It will definitely help to give the desired driving force to further investments – both domestic and foreign – into the sector.

Once this flowing of funds is ensured, the hi-tech sub-sectors of the small scale industry will also march ahead with the new-found technological advancement.

However, we still have a long way to go. I feel that the formation of Centre-State coordination committees to ensure the implementation is a must if we are to do full justice to this novel act.

Take for instance the clothing industry. The Indian clothing industry needs to gear up its effort to produce high-value added technical garments instead of exporting low and medium value apparel. And the rightful implementation of this (MSMED) Act can give a major boost to produce assured quality products.