A single comprehensive legislation was made for promotion and development of MSME sector in 2006 when the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006’ was passed.
The policies for MSME sector development initiated by the central and state governments can be summed up as follows:
1. Providing infrastructural facilities at low rates; piece of land, water, electricity, drainage systems etc.
2. Providing marketing facilities and assisting MSMEs to market their product in domestic as well as foreign markets.
3. Concessions in taxes, duties etc.
4. Providing finance at low interest rates.
5. Preference in credit allocation by banks and financial institutions.
6. Providing incentives and subsidies
7. Rehabilitation of weak and sick MSMEs
8. Creation of two funds of Rs. 2000 crores each in SIDBI – namely i. Risk Capital ( for risk capital financing) ii. Refinance Fund ( for enhancing refinance capability for MSME sector)
9. Providing consultancy on technical matters.
10. Preference policies in respect of procurement of goods and services provided by MSMEs.
11. Legal provision and protection to check delayed payments to micro and small enterprises.
12. Providing seed capital
13. Providing entrepreneurial training
14. Self-employment promotion schemes.
15. Special rebate and concessions for MSMEs establishing in industrially under developed or backward areas.
16. Entrepreneurial training and motivational schemes for women entrepreneurs and backward class entrepreneurs
17. Promotion of exports of goods produced by MSME sector through Export Promotion Councils.