UP Cabinet approves draft bill allowing MSMEs to start operations within 72 hrs of application, without wait for NOCs

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August 20, 2020 6:45 AM

Interestingly, until now UP did not have its own MSME Act and was working on the basis of the central Act.

At present, one needs to get clearances from 29 different departments before being allowed to establish an MSME unit in the state.

To facilitate the setting up of more businesses in Uttar Pradesh, especially in the post-Corona times, the state’s Cabinet has approved a draft bill that allows MSMEs to start operations within 72 hours after submitting their application, without having to wait for no objection certificates (NOCs) from various departments.

The Micro Small and Medium Enterprises (Infrastructure and Operation) Bill 2020, which would be tabled in the monsoon session of state legislature for approval, proposes to exempt MSMEs from various approvals and inspections that are required for their establishment and operations in the initial years.

At present, one needs to get clearances from 29 different departments before being allowed to establish an MSME unit in the state.

Interestingly, until now UP did not have its own MSME Act and was working on the basis of the central Act.

Speaking to FE, additional chief secretary, MSME, Navneet Sehgal said henceforth anybody willing to set up a new MSME unit can submit an application on a prescribed format and would be given approval within 72 hours. “An application can be made through a “Declaration of Intent” at the District Level Nodal Agency (DLNA), which will have to issue an acknowledgment within 72 hours of receiving the application. This acknowledgment certificate will remain valid for 1,000 days from the date on which it is issued. On the basis of this acknowledgement, one can establish their unit,” he said, adding that the investor will then have 1000 days to get the necessary clearances after the first go-ahead.

“The new law would help setting up of more MSMEs in the state, which in turn would help create employment opportunities. We have set a target to create about 15 lakh jobs in the next one year,” he said. However, MSME units producing products like tobacco, gutka, pan masala, alcohol, carbonated drinks, fire crackers, plastic bags of 40 microns or less and other items that are banned by the government or marked by UP Pollution Control Board in red category will not be covered by the act.

Meanwhile, in another related development, MSMEs in UP will get a marketing assistance of up to Rs 5 lakh under the new start-up policy.

Addressing a virtual conference on “Role of Information Technology in transforming MSMEs’ future during Covid-19” organised by PHDCCI, additional chief secretary (Electronics and Information Technology) Alok Kumar said the government has notified the new Start-Up Policy 2020, which is aimed at extending support and encouragement to start ups and incubation centres in the state. “Under the new policy, there is a window of up to Rs 5 lakh as marketing assistance to MSMEs,” he said.

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