MSME stands for Micro Small and Medium Enterprises. In developing countries MSME sector is called the growth engine of the nation. Strengthening MSMEs would have multifold effect of boosting the economy and generating employment as well as reduce issues relating to migration of skilled, unskilled workers and professionals to metro cities.
MSMEs contribute in industrialization of rural and backward areas, reducing regional imbalances through the best utilization of their resources, ensuring equitable distribution of national income and wealth, being major partner in the process of inclusive growth.
Make in India initiative was launched by the Government of India on 25th September 2014 with a vision to develop India into a Global Manufacturing Hub. This flagship initiative aims to increase Foreign Direct Investment (FDI), encourages innovation, skill development, Make India digital, creation of jobs, companies to manufacture in India and to build a sustainable eco-system for businesses in India.
Hon. Prime Minister Narendra Modi while launching the Make in India initiative scheme said, “I want to tell the people of the whole world: Come, make in India. Come and manufacture in India. Go and sell in any country of the world, but manufacture here. We have the skill, talent, discipline and the desire to do something. We want to give the world an opportunity that come make in India.”
‘Make in India’ recognises ‘ease of doing business’ as the most significant factor to promote entrepreneurship, for that it has undertaken several measures. The aim is to de-license and de-regulate the industry during the entire life cycle of a business.
Our Existing infrastructure needs to be developed for increasing growth of the industry, Government intends to develop industrial corridors and smart cities with state-of-the-art technology and high-speed communication that will boost innovation and research base of India.
The government of India has identified 25 Priority sectors manufacturing, infrastructure and service activities and detailed information is being shared through interactive web-portal and professionally developed brochures. Visit https://www.makeinindia.com/sectors for more details.
Make in India intends to change industry’s existing mindset of seeing government as a Regulator to a new mindset as a Facilitator.
Make in India initiative facilitates the expansion of MSMEs, encourages them to focus on innovation and improve their manufacturing processes. Majority of businesses in India have limited owner/promoters contribution little , as a result they are majorly dependent on credit (loans) to set up their enterprise. This initiative brings investments by way of FDI to MSME's, which will allow them to expand their business and resolves their Issues related to credit availability.
Make in India initiative also places importance on the ‘Zero Defect and Zero Effect’ model which means high quality products with zero wastage and without any adverse effect on the environment. To promote this among MSMEs the government has launched a Financial Support to MSMEs in ZED Certification Scheme.
As a part of Make in India initiative the government has undertaken various measures for the purpose of Ease of Doing Business thereby reducing some of the burden of MSME Sector. India’s ranking in ‘World Bank's Ease of Doing Business Ranking 2020’ has also jumped 79 positions from 142nd in 2014 to 63rd in 2019.
Few areas in which measures have been undertaken for Ease of Doing Business are as follows:
For more details Visit: https://www.makeinindia.com/eodb
Startup India initiative was announced by the Hon. Prime Minister Narendra Modi during his speech on 15th August, 2015 and it came into force on 16th January 2016. This initiative aims at creating a robust Start-up ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs along with employment generation and wealth creation.
In order to meet the objectives of this initiative, the government announced an action plan spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation” which includes various benefits, exemptions and support that would be given to startups An Eligible startup needs to apply for Registration and get recognized by The Department for Promotion of Industry and Internal Trade (DPIIT) to claim the benefits available under this initiative
Benefits Available Under Startup India Initiative
Rebate on filing of application - Startups are provided with an 80% rebate in filing of patents vis-a-vis other companies, bringing down the cost from INR 8,000 to INR 1,600. This helps them cut down on costs in their early years. 50% rebate is also provided in filing of trademarks vis-a-vis other companies decreasing the cost from INR 10,000 to INR 5,000.
Panel of facilitators - To assist in IP applications. Facilitators are responsible for providing general advisory on different IPRs, and information on protecting and promoting IPRs in other countries. Central Government bears the entire fees of the facilitators for any number of patents, trademark or designs, and startups only bear the cost of the statutory fees payable.
Fast-tracking of startup patent applications - The patent application of startups is fast-tracked for examination and disposal. The process is much faster for Recognised Startups.
Entity will be allowed to self-certify compliance with 6 Labour Laws & 3 Environment Laws i.e. no inspections will be conducted for a period of 3 to 5 years. Inspection will only be conducted on receipt of credible & verifiable complaint of violation. This will ease the burden of compliance for the startup.
6 Labour laws are
The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996
The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
The Payment of Gratuity Act, 1972
The Contract Labour (Regulation and Abolition) Act, 1970
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
The Employees’ State Insurance Act, 1948
3 Environment Laws are
The Water (Prevention & Control of Pollution) Act, 1974
The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
The Air (Prevention & Control of Pollution) Act, 1981
Exemption on Profits for 3 Years - The recognised startups that are granted an Inter-Ministerial Board Certificate are exempted from income-tax for a period of 3 consecutive years out of 10 years since incorporation.
Exemption from Angel Tax under section 56(2)(viib) - Angel Tax i.e section 56(2)(viib) is applicable when a closely held company issues its shares to a resident person at a price which is more than its fair market value calculated as per prescribed rules. This section becomes applicable in majority cases when startups want to raise money through issue of shares as the valuation determined for issuing shares is more than fair market calculated as per rules. However, a DPIIT recognized startup is given exemption from this section, subject to certain conditions
Relaxations in case Employee Stock Option Plan (ESOP) of Startups - In order to ease the burden of payment of taxes by the employees of the eligible start-ups or TDS by the start-up employer, TDS or tax payment has been deferred to earlier of the following period
Startups can bid for government tenders and become a seller to the Government through the Government e-Marketplace (GeM) and other channels
Government of India has authorised its ministries, departments and public sector undertakings to relax norms in all public procurements. Startups are given exemptions relating to
To provide equity funding support for development and growth of innovation driven enterprises, the government has set aside a corpus fund of INR 10,000 Cr managed by SIDBI. The fund is in the nature of Fund of Funds, which means that the government participates in the capital of SEBI registered Venture Funds, who invest twice the amount in startups (For instance, if contribution sought is Rs 100 crore under FFS, Venture Capital Fund should invest at least Rs 200 crore in Startups). The flow of funds is from Government to SIDBI to Venture Capital Funds to Startups 424 Startups including Dunzo, CureFit, Unacademy, Fresh to Home have been supported under FFS as on 31st March, 2021
Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise. Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept, prototype development, product trials, market entry and commercialization has been established. Similarly, banks provide loans only to asset-backed applicants. To resolve this issue the Startup India Seed Fund Scheme is introduced to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization
Ministry of Corporate Affairs has notified Startups as ‘fast track firms’ enabling them to close down operations within 90 days as against 180 days for other companies. Startups with simple debt structures or those meet such criteria as may be specified may be wound up within a period of 90 days from making of an application for winding up on a fast-track basis.
Various other benefits such as Capital Guarantee Fund for Startups, Organization of Startup Fests for Showcasing Innovation and Providing a Collaboration Platform, Launch of Atal Innovation Mission (AIM) with Self Employment and Talent Utilization (SETU) Program
Eligible Startup means a Private Limited Company or Partnership Firm or a Limited Liability Partnership
To Register Your Startup You Can Visit https://www.startupindia.gov.in/
For Any Assistance You Can Contact Us
To Avail Our Start-up Registration Service Click Here
As per the MSMED Act, 2006 in case of supply of goods and services by Micro and Small Enterprises the payment shall be made by the buyer on the date agreed between the buyer and the seller in writing or, in case of no agreement, before the Appointed day. However, in no case the period agreed between seller and buyer shall exceed more than 45 days.
If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest to the seller on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank. MSME Samadhan portal has been created specifically to facilitate online applications regarding delayed payments.
Appointed day is the day following immediately after expiry of 15 days from the day of acceptance or deemed acceptance of any goods or services.
Day of acceptance means
(a) the day of the actual delivery of goods or the rendering of services;
(b) where any objection is made in writing by the buyer regarding acceptance of goods or services within 15 days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier.
Day of deemed acceptance means where no objection is made in writing by the buyer regarding acceptance of goods or services within 15 days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.
Launching various Portals/Platforms to resolve various issues faced by MSME’s. Some of portals are as followsTo Know More About These Portals Click Here
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