The Punjab Cabinet this week gave its approval to a Punjab Right to Business Bill, 2020, a law aimed at ensuring ease of doing business for the Micro, Small and Medium Enterprises (MSME) sector.
Does the law promise approvals in a specified timeframe?
Under the law, an MSME unit can be set up after ‘In-Principle’ approval from the District Bureau of Enterprise, headed by the Deputy Commissioner, working under the guidance of the State Nodal Agency, headed by the Director, Industries. Approval for units in approved Industrial Parks will be given in three working days. For new enterprises outside approved Industrial Parks, the decision on the “Certificate of In-Principle Approval” shall be taken by the District Level Nodal Agency within 15 working days, as per the recommendations of the Scrutiny Committee.
What is the timeframe for unit owners to comply?
Unit owners will have three and a half years after setting up the unit to obtain seven approvals from three departments: the sanction of building plans; issuance of completion/occupation certificate for buildings; registration of new trade licences under The Punjab Municipal Act, 1911 and The Punjab Municipal Corporation Act, 1976; change of land use under The Punjab Regional and Town Planning and Development Act, 1995; application for No-Objection Certificate under The Punjab Fire Prevention and Fire Safety Act, 2004; approval for factory building plan under The Punjab Factory Rules, 1952; and registration of shops/establishments under The Punjab Shops and Commercial Establishments Act, 1958.
The industries involving hazardous processes will have to obtain a Fire NOC and get approval for the factory building plan before setting up the unit. All units will have to get environmental clearance from the Pollution Control Board beforehand.
Why was a law needed, rather than an executive order?
According to the government, the Act will have overriding powers over various Acts of different departments that make approvals necessary before the setting up of small and medium units — this purpose could not have been achieved by an executive order. The Punjab Department of Industries was preparing to bring an Ordinance, but since a special session of the Assembly has been called to extend reservations for SCs and STs for another 10 years, the Right to Business Bill will also be brought before the House on January 17.
How the law actually works on the ground remains to be seen, however.
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