Yajur Sood, University Institute of legal studies, Panjab university
Abstract
In any developing economy, its domestic industry plays a great role in boosting domestic economic growth, and to provide opportunity and employment to all its constituents. Like, the same role is played by the domestic industry of India. However, the only difference between India and the world around in this regard would be that, the proportion of GDP contribution that the micro, small and medium enterprises (MSME’s) would have in terms of domestic industry contribution to GDP and overall contribution to GDP, is far lesser than it is in other countries, and than the level it is required for boosting economic growth and bringing growth parity. Despite providing employment to 45% people in India, the MSME sector stilla accounts for only 8% of our GDP contribution. Sensing the need to take special measures, in order to ease the doing of business, and providing ancillary benefits to the MSME’s, the Government of India, passed the MSME Act, 2006, which provided a wide range of benefits to the MSME’s in order to make them more competitive and secure as compared to the larger players in the market, and to also provide them with a fair opportunity that they deserved. The benefits that were provided were namely preference in government procurement, protection against delayed payments, interest on delayed payments and dispute resolution mechanism. This paper seeks to analyze the benefits of each of these provisions and what sort of an impact that they can have on the Indian MSME sector.
Keywords: MSME’s, delayed payments, procurement preference, interest on delayed payments, dispute resolution in MSME.
