Page 126 - economic review

Industry and Labour98

Box No: 3.7
The Micro, Small & Medium Enterprises Development Act, 2006

India is one amongst very few countries which has a legal framework for the MSME Sector in
the form of MSMED Act 2006 which has established provisions under which issues like public
procurement and delayed payments are addressed.

Present investment limit for MSME’s under MSMED act,2006 is as below:
Manufacturing enterprises:

i. Micro enterprise: Investment in plant and machinery upto ` 25 Lakh.
ii. Small enterprise: investment in plant and machinery from ` 25 Lakh to ` 5 Crore
iii. Medium enterprise: investment in plant and machinery from ` 5 Crore to ` 10 Crore
Service enterprises:
i. Micro investment: Investment in equipment upto ` 10 Lakh.
ii. Small enterprise: investment in equipment from ` 10 Lakh to ` 2 Crore
iii. Medium enterprise: investment in equipment from ` 2 Crore to ` 5 Crore

Mandatory Procurement from MSMEs

3.34 The Government of India notified Public Procurement Policy for MSEs, vide Order dated
23.3.2012 (effective from 1st April, 2012), for goods produced and services rendered by Micro &
Small Enterprises (MSEs). The policy mandates that all the Central Ministries / Departments / CPSUs
shall procure minimum of 20% of their annual value of goods / services required by them from Micro
and Small Enterprises. Further, policy has earmarked a sub-target of 4% procurement out of this
20% from MSEs owned by SC / ST Entrepreneurs. The policy would become mandatory with effect
from 1.4.2015.

State Profile of the MSME Sector

3.35 The number of New Enterprises filed Memorandum under MSMED Part II in Kerala during the
year 2013-14 was 14997, 15 % more than that of previous year which was 13043. Out of 14997, 602
(4%) MSMEs are registered by SC, 97 (0.6%) by ST and 3354 (22%) by women. Investment on the
sector increased by 20% to ` 222412.30 lakh from ` 185051.41 lakh in 2012-13 while employment
generated increased by 7% from 81961 to 87789. The value of goods and services produced in
2013-14 had an increase of 9% to ` 675597.11 lakh from ` 621414.30 lakh of the previous year. The
details are given in Appendix 3.16.

3.36 In Kerala, during the current year (as on 30.09.2014) 6944 new enterprises have filed
memorandum with an investment of `114829.70 lakh to provide employment to 39651 persons. The
details are given in Appendix 3.17.

3.37 The total number of working SSIs/MSMEs registered in Kerala as on 31.03.2014 is 234251
ie. 7% more than 219444 that of previous year . Out of the total SSIs/MSMEs, 3.8% are promoted
by SCs, 0.7% by STs and 25% by women entrepreneurs. The total investment was ` 1435301 lakh
in 2013-14 against ` 1212674 lakh of previous year indicating an increase of 18% while the total
value of goods and services produced was ` 5084827 lakh which indicates an increase of 17% over
` 4336994.79 lakh of previous year. The total number of employment generated was 1190944 while
in the previous year it was 1103126 indicating an increase of about 8%. The details are given in
Appendix 3.18.

Kerala State Planning Board