Labour law exemptions for MSMEs in Madhya Pradesh

The Mad­hya Pradesh gov­ern­ment announced exemp­tion from some labour laws for the micro, small and medi­um enter­pris­es (MSME) sector.

Chief Min­is­ter Shiv­raj Singh Chouhan also said the gov­ern­ment would estab­lish a Rs 100-crore ven­ture cap­i­tal (VC) fund and a sep­a­rate depart­ment for the sec­tor. He said so while inau­gu­rat­ing a three-day Glob­al Investors Sum­mit, fourth in a series, here. Prime Min­is­ter Naren­dra Modi is expect­ed here on Thursday.

The CM said MSMEs in the state will now have to file only one return on com­ply­ing with labour laws, instead of the 40-plus at present. Exemp­tions are pro­posed on the Fac­to­ries Act and Indi­an Con­tract Act.

The pro­posed VC fund is to par­tic­i­pate in the equi­ty of these units. “We will cre­ate a sep­a­rate depart­ment that will focus on MSME issues,” he said.

The Con­fed­er­a­tion of Indi­an Indus­try, Pitham­pur Audyo­gik San­gath­an and Mad­hya Pradesh Laghu Udyog Sangh wel­comed the announce­ment but they and oth­ers also not­ed some of this wasn’t new.

The gov­ern­ment has two promi­nent agen­cies, dis­trict indus­try cen­ters (DICs) and Audyo­gik Kendra Vikas Nigams (AKVNs), to take care of MSMEs. These agen­cies pri­mar­i­ly allot land to the sector.

The Cab­i­net had pro­posed in 2012 to bring AKVNs and DICs under the MP State Trade and Facil­i­ta­tion Cor­po­ra­tion (Tri­fac), to make it stronger. How­ev­er, this hasn’t hap­pened, due to sec­ond thoughts. “If DICs and AKVNs are brought under Tri­fac, the facil­i­ta­tion agency, which agency will take care of cre­at­ing indus­tri­al infra­struc­ture at the dis­trict lev­el? Gujarat, Kar­nata­ka and Rajasthan have sep­a­rate agen­cies for cre­ation of infra­struc­ture. If Tri­fac is engaged with SMEs, which agency will facil­i­tate large scale indus­tries,” a gov­ern­ment source asked.

Chouhan also announced a sep­a­rate MSME Devel­op­ment Board under his chair­man­ship, to meet at least thrice a year.

The CM said 27 new indus­tri­al clus­ters were being planned and at least a fifth of the land would be kept for MSMEs. “We want to focus on indus­tri­al­i­sa­tion of the state and MSMEs are a vital cog in it,” said Chouhan.