NATIONAL BOARD FOR MICRO, SMALL AND MEDIUM ENTERPRISES

[Mr. M. GOVINDARAJAN]

Board

Section 2(c) of Micro, Small and Medium Enterprises Development Act, 2006 (‘Act’ for short) defines the term ‘board’ as  the National Board for Micro, Small and Medium Enterprises established under section 3. 

Section 3 of the Act provides that the Central Government shall establish the National Board for Micro, Small and Medium Enterprises (‘Board’ for short).  The head office of the Board shall be at Delhi.

Members of the Board

Section 3 of the Act provides that the Board shall have the following members-

(a) Chairperson – Minister in charge of the Micro, small and medium enterprises – ex-officio;

(b) Vice Chairperson – Minister of State or Deputy Minister of Micro, small and medium enterprises (MSME for short) – ex-officio.  If no such minister of State or Deputy Minister is available the Central Government appoint such person as Vice Chairperson;

(c) Six Members – Ministers of State Governments in charge of small scale industries of MSMEs – to be appointed by Central Government to represent such regions of the country – ex-officio;

(d) Three M.P.s – two from Lok Sabha and one from Rajya Sabha;

(e) Administrator of Union Territory to be appointed by Central Government – ex-officio;

(f) Secretary in charge of Ministry of MSME – ex-officio;

(g) Four Secretaries in charge of representing Commerce and Industry, finance, food processing industries, labor and planning to be appointed by the Central Government – ex-officio;

(h) Chairman, Board of Directors of National Bank – ex-officio;

(i) Chairman and Managing Director of Board of Directors of Small Industries Bank – ex-officio;

(j) Chairman – Indian Banks Association – ex-officio;

(k) One officer of the Reserve Bank, not below the rank of an Executive Director, to be appointed by the Central Government to represent the Reserve Bank;

(l) 20 persons to represent the associations of micro, small and medium enterprises, including not less than three persons representing associations of women's enterprises and not less than three persons representing associations of micro enterprises, to be appointed by the Central Government;

(m) 3 persons of eminence, one each from the fields of economics, industry and science and technology, not less than one of whom shall be a woman, to be appointed by the Central Government;

(n) 2  representatives of Central Trade Union Organizations, to be appointed by the Central Government; and

(o) one officer not below the rank of Joint Secretary to the Government of India in the Ministry or Department of the Central Government having administrative control of the micro, small and medium enterprises to be appointed by the Central Government, who shall be the Member-Secretary of the Board - ex officio.

Tenure of members

The term of office of the members of the Board, other than ex officio members of the Board is not exceeding 2 years from the date of his appointment.

The M.P.s shall cease to be a member of the Board if he ceases to be a member of the House of Parliament by which he was so elected.

A member appointed under clauses (k), (1), (m) and (n) of sub-section (3) of section 3 shall cease to be a member of the Board if he ceases to represent the category or interest from which he was so appointed.  He shall be eligible for reappointment.

Removal of member from the Board

The Central Government may remove a member of the Board from it, if he-

(a) is, or at any time has been, adjudged as insolvent; or

(b) is, or becomes, of unsound mind and stands so declared by a competent court; or

(c) refuses to act or becomes incapable of acting as a member of the Board; or

(d) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(e) has so abused, in the opinion of the Central Government, his position as a member of the Board as to render his continuance in the Board detrimental to the interests of the general public.

No member shall be removed from his office on the grounds specified in clauses (c) to (e) of that sub-section unless he has been given a reasonable opportunity of being heard in the matter.

Resignation

The office of a member, other than an ex officio member, shall fall vacant from the date on which his resignation is accepted or on the expiry of thirty days from the date of receipt of intimation of resignation, whichever is earlier.  The power to accept the resignation of a member shall vest in the Chairperson who, on accepting the resignation, shall report to the Board at its next meeting.

Address of members

If a member changes his address, he shall notify his new address to the Member-Secretary of the Board who shall thereupon enter his new address in the official records.  If a member fails to notify his new address, the address in the official records shall for all purposes be deemed to be the member's correct address.

Filling vacancies

The Central Government may evolve such criteria and hold such consultations as it 'may think fit, before appointing members from among the representatives specified in clauses (I), (m) and (n) of  sub-section (3) of section 3, each time the Board is constituted. 

When a member dies or resigns or is deemed to have resigned or is removed from office or becomes incapable of acting, the Central Government may, by notification in the Official Gazette, appoint a person to fill that vacancy.

Where the vacancy occurs in a membership which was held by an outgoing member by virtue of his membership in the Parliament under clause (d) of sub-section (3) of section 3, the appointment of the next incumbent of that vacancy shall be on the basis of a fresh election by that House of Parliament to which the outgoing member belonged.

Functions of the Board

The following are the functions entrusted to the Board-

• to examine the factors affecting the promotion and development of micro, small and medium enterprises and review the policies and programmes of the Central Government in regard to facilitating the promotion and development and enhancing the competitiveness of such enterprises and the impact thereof on such enterprises;
• make recommendations on matters referred to in above or on any other matter referred to it by the Central Government which, in the opinion of that Government, is necessary or expedient for facilitating the promotion and development and enhancing the competitiveness of the micro, small and medium enterprises; and
• advise the Central Government on the use of the Fund or Funds.

Meeting of the Board

The Board shall meet at least once in every three months in a year.  If it is deemed necessary and expedient to hold a meeting of the Board outside its headquarters at Delhi, the reasons for holding such meeting shall be recorded in writing with prior approval of the Chairperson.   The Chairperson may at any time call a special meeting of the Board in case of urgency, after informing the members in advance about the subject matter of discussion and the reasons of urgency.

The Board may associate with itself, in such manner and for such purposes as it may deem necessary, any person or persons whose assistance or advice it may desire in complying with any of the provisions of this Act and a person so associated shall have the right to take part in the discussions of the Board relevant to the purposes for which he has been associated but shall not have the right to vote.

The Chairperson of the Board shall, for not less than two of the meetings of the Board in a year, invite such Ministers of the State Governments having administrative control of the departments of small scale industries or, as the case may be, the micro, small and medium enterprises, or the Administrators of Union territories and representatives of such other associations of micro, small and medium enterprises, as he may deem necessary for carrying out the purposes of this Act.

The agenda to be considered at a· meeting of the Board shall be approved by the Chairperson and shall ordinarily be issued by the Member-Secretary fourteen days before the approved day of the meeting and shall be left at, or posted to the address of every member of the Board.  The Board may take up any item outside the agenda with the permission of the Chairperson.

The Chairperson or, in his absence, the Vice- Chairperson, shall preside over the meetings of the Board.   The quorum for any meeting of the Board shall be twelve.

The Central Government may debar any member, other than ex officio members, from taking part in the meetings of the Board if-

• he absents himself from two consecutive meetings of the Board without written information to and consent of the Chairperson and, in any case, from three consecutive meetings, or
• in the view of the Central Government, the act of a member is or is likely to be detrimental to the policies and programmes of the Government for promotion, development and enhancing competitiveness of micro, small and medium enterprises.

Proceedings not to be invalid

No act or proceedings of the Board shall be invalid merely by reason of-

• any vacancy in, or any defect in the constitution of, the Board; or
• any defect in the appointment of a person acting as a member of the Board; or
• any irregularity in the procedure of the Board not affecting the merits of the case.

Powers and functions of Member Secretary of Board

The Member Secretary shall-

• act as the Head of the office of the Board;
• sanction necessary expenditure on contingencies, supplies, services and articles required for the working of the Board and its office , execution of the functions assigned to the Board and furtherance of the objects of the Act, subject to provisions being made in the annual budget for this purpose;
• maintain or cause to be maintained an account of the receipts and expenditures of the Board in such form as may be notified by the Central Government in consultation with the Comptroller and Auditor-General of India;
• assist the Chairperson in all administrative matters relating to the Board;
• keep or cause to be kept a record of names of members and their addresses;
• make arrangements for the meetings of the Board; and
• issue minutes of the meetings of the Board, as approved by the Chairperson.