India: The Micro, Small And Medium Enterprises (Amendment) Bill, 2015

The concept of facilitating small and medium enterprises can be traced back to the Industries Development and Regulation Act, 1961. Under that Act, the government had the power to amend the Act from time to time in order to ensure the development of small and medium enterprises. Subsequently, the Micro, Small and Medium Enterprises Development Act, 2006 was enacted to ensure the promotion and development of small scale industry. It classifies and regulates enterprises as micro, small and medium enterprises. This Act received attention during the "Make in India" campaign of the new government and the Micro, Small and Medium Enterprises (Amendment) Bill, 2015 was introduced in the Lok Sabha on 20 April 2015.
The Bill increases the amounts of investment in plant and machinery for enterprises engaged in the manufacture or production of goods (pertaining to specified industries) to qualify as micro, small or medium enterprises, and thus brings more enterprises within the fold of the regime.

For enterprises involved in the provision of services, the amounts of investment in equipment have been increased as under:

The Bill also allows for the Central Government to change these investment limits through a notification, by up to three times the specified limits.
In other developments relating to micro, small and medium enterprises, about 108 micro, small and medium enterprises have been identified for focused intervention to increase exports in order to promote the 'Niryat Bandhu Scheme' of the new government (a scheme to mentor new and potential exporters on the intricacies of foreign trade).

Originally published June 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.