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Section-26

Reservation By Notified Order

In particular, and without prejudice to the generality of the provisions of any law in force the Central Government may, if it is satisfied, after considering the recommendations made to it by an Advisory Committee to be constituted by Government and including representatives of the Union Ministries of Industry, Finance, Commerce and the Central Commissioner together with representatives from State/UT governments, that it is necessary so to do for the development and expansion of small enterprise by notified order, direct that any article or class of articles specified by the Central Government under Section 4(1) (d) of the Act shall, on and from such date as may be specified in the notified order (hereafter in this Chapter referred to as the “date of reservation” be reserved for exclusive production or provision by the small enterprises(hereinafter in this Chapter referred to as reserved article).

 The Advisory Committee should also include representatives of SSI Associations.

Subsection (1) of Section-34

Power to make rules

The Central Government may make rules, for carrying out the purposes of this Act, subject to the condition of previous publication.

This Subsection may be modified as under:-

The Central Government may make rules, for carrying out the purposes of this Act, subject to the condition of previous publication. Sufficient time shall be given to the Industry Associations to react before implementation of such rules.

Third Schedule Rule-2 Clause (1)

Special Inspection

If the Chief Inspector has reason to believe that any industrial establishment has committed default of any provisions of the scheduled Acts or rules, and he considers it fit and expedient that an enquiry and inspection is necessary, he may, for reasons to be recorded in writing, carry out an inspection himself or direct that a special inspection be carried out by an Inspector with or without prior notice to the owner, occupier or manager.

This clause may be modified as under:-

If the Chief Inspector has reason to believe that any industrial establishment has committed default of any provisions of the scheduled Acts or rules, and he considers it fit and expedient that an enquiry and inspection is necessary, he may, for reasons to be recorded in writing, carry out an inspection with the permission of Commissioner Industries only, himself or direct that a special inspection be carried out by an Inspector with prior notice to the owner, occupier or manager.

Encl:  Appendix ‘A’

Appendix 'A'
Modification suggested in factories Act 1948 other than Stated in column 3 of schedule four. Factory act 1948 should not be made applicable to Small enterprises employing less than 50 workers for manufacturing process using power and less than 100 workers for manufacturing process without power.
Trade Union Act 1926

General Comments on other various acts applicable to  SSI at present.

 This Act not to apply to Small Enterprises.

The need to formulate new SSI Legislation was realised mainly due to the fact that Owners of Small Enterprises had to face over 60 inspections under different Acts. Full knowledge of Each Act with main clause, sub Clauses and the explanations require full time involvement of the SSI Entrepreneur. For example if we are to follow the factory act alone word by word, then we may not be running our enterprise but will be busy full time in following statutory provisions of this Act. For each minor violation of any act( which normally is not intentional) the entrepreneur is  treated like a criminal.

A small entrepreneur is always under tension, due to the fear of inspectors, uncertainty about his future, fear of liquidation of his assets due to uncertainty of the market. It is observed that SSI entrepreneur do not want his children to opt for self employment due to these tensions.

The need therefore is to modify these acts in such a manner that an Entrepreneurs is able to  concentrate on his enterprise, provide more  employment, pay more Taxes and  create an environment where new entrepreneurs are attracted to set up Small industrial units.

More thoughts and discussions   are therefore required  before finalizing these Acts. Govt. may also consider the views of the Entrepreneurs who have failed in their efforts and then landed up in Jail and have   Spoiled the future of their  entire family.

We also recommend that the Minimum wage Act should be applied only when the Govt. was in a position to provide employment to each & every person willing to work in India. Another Paradox is asking someone to provide guarantee for something which he does not have. Entrepreneur does not have any guarantee for his future how he can give guarantee for his  employees.

We suggest a social welfare department be created by the Government  which will provide social security to each & every workers including entrepreneurs when he fails. Govt. may collect a cess on the wage bill of each enterprise to cover up for ESIC, PF, Bonus, Gratuity retrenchment compensation or so on. This will relieve the SSI entrepreneur from lot of hassles and he will be able to concentrate more on his enterprise for meeting the  competition.

Bonus Act: Bonus has been termed as deferred wage also. It was paid to keep good relation between worker & employer. It is therefore a matter purely between the employer and the employee. If at all Govt. wants to interfere a minimum rate be prescribed, hence there is no need to prescribe detailed formula for set on/set off and so on.

In the end it is submitted that IIA have set up a Study Group for detailed recommendations on this SSI Act. It is therefore requested that whenever there is any discussion on this new SSI Act, IIA may be invited to place its views before the Government.

 

 

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