Punjab cabinet approves rules to improve biz climate for MSMEs

The Punjab government on Monday cleared regulations for easing the approval process for the setting up of new micro small and medium enterprises (MSMEs).

The new regulations have been drafted under the the provisions of Punjab Right to Business Act, 2020, which was notified on February 6, 2020, after approval by the State Legislative Assembly on January 17, 2020.

The Punjab cabinet approved the Punjab Right to Business Rules, 2020, paving the way for setting up of MSME units on fast track across the state, a release said.       

The cabinet, at its meeting chaired by Chief Minister Amarinder Singh, gave the go-ahead to the notification of the rules, with a view to easing the process of approval/clearances for setting up of new micro, small and medium enterprises (MSME), it added.           

Various sanctions and approvals such as building plan, completion certificate, and trade license registration, except for industries involving hazardous process, as well as registration of shops or establishments, would be granted by the district-level nodal agency headed by Deputy Commissioner under the new rules.

For units being set up in approved industrial parks, the certificate of in-principle approval would be issued within three working days after the submission of declaration of intent by the applicant.

For areas outside the industrial park, such certificates would be issued within 15 working days. The said certificate would be valid for a period of three and half years, and the concerned unit shall apply for regular approvals not later than three years on the Invest Punjab Business First portal from the date of issuance of certificate of in-principle approval, the statement said.           

These rules would help the MSMEs to start their building construction and commercial production quickly.          

The cabinet took note of the crucial role played by the MSME sector in providing huge employment opportunities at comparatively lower capital cost.

MSMEs also help in industrialization of rural and backward areas, thereby reducing regional imbalances, the cabinet noted, terming the MSME sector a vital engine for the state's socio economic growth.           Meanwhile, in another decision, the cabinet gave approval to withdrawal of notification under the Industrial Employment (Standing Orders) Act, 1946, exempting all MSME establishments in Punjab from mandatory certifying of standing orders and exempting industrial establishments engaged in continuous process to deploy their workers on holidays.            

As per the provisions of The Industrial Employment (Standing Orders) Act, 1946, the employers have to get the standing orders certified if they employ 20 or more workers.

To reduce compliance burden on the employers, this limit of 20 workers has been increased to 100 workers as originally envisaged in The Industrial Employment (Standing Orders) Act, 1946.

The need for certification of standing orders has been done away with and model standing orders have been made applicable on them, it said. In Punjab, many factories are engaged in manufacturing processes which are continuous in nature.

Sometimes workers seek holidays as per the provisions of 'The Punjab Industrial Establishment (National and Festival Holiday and Casual and Sick Leave) Act, 1965', which leads to disturbance in the manufacturing process.  

To overcome such situation, powers have been exercised under Section 13(2) of The Punjab Industrial Establishment (National and Festival Holiday and Casual and Sick Leave) Act, 1965 to exempt the industry engaged in continuous process from the provisions of this Act, it said.