The Micro, Small and Medium Enterprises (MSMED) Act was enacted in the year 2006. Considering that the MSMEs may be vulnerable due to delay and refusal of payment for more than 45 days by the recipients of the products and services produced by MSMEs, a body called Facilitation Council was established in the MSMED Act. At present, this body is being constituted and functioning by the state governments across India.
In Tamil Nadu, the Facilitation Council has been constituted in the cities of Chennai, Coimbatore, Madurai and Trichy. As per the rules of the Government of Tamil Nadu, the Commissioner of Industries or the Additional Commissioner of Industries and Commerce will be the Chairman of the Facilitation Council and five members will be in this Council. A representative of the MSME Association, a representative of the Bank and Financial Institutions and a person with expertise in industry, finance, law, commerce etc. are members of this committee. The Regional Director of the Industry and Commerce Department has been appointed as the Secretary of this Council for the Chennai Council and the General Manager of the District Industries Centre has been appointed as the Secretary of the Councils functioning in Coimbatore, Trichy and Madurai.
This Facilitation Council has been given the power to receive complaints and send notices to the opposite parties for investigation and to conduct an investigation and issue appropriate orders, similar to the power given to the civil court. However, this body does not function as a full-time body and the chairman and majority of the members appointed in it are key officers of other departments. Due to this, there is a delay in taking decisions on the complaints filed by MSME entrepreneurs and taking appropriate steps to implement them. The chairman and majority of the members of this Council do not have autonomy because they are working under a specific department. Moreover, the fact that these councils are not located in the respective districts to facilitate access by the affected people is seen as a major shortcoming. Due to this, these councils are not easily accessible.
Considering the difficulties in getting quick and easy resolution in the existing council system when there is a problem in receiving the money due to them after supplying goods or services, the MSME Development Act can be amended to set up a MSME Disputes Redressal Commission instead of the Facilitation Council. The MSME Disputes Redressal Commission should be set up in a way that it functions as an autonomous judicial body like the District Consumer Disputes Commissions without being under the direct control of the government and has a permanent chairman and members.
Since funds are required to set up and operate the MSME Disputes Redressal Commission in each district, the responsibilities of this commission can be delegated to the District Consumer Disputes Commissions as an additional charge as an alternative arrangement. This will make it easier for micro, small and medium entrepreneurs who are facing problems due to non-collection of money in all districts to approach the district commissions.