Punjab to bring Right to Business Act

| | Chandigarh
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Punjab to bring Right to Business Act

Tuesday, 03 December 2019 | PNS | Chandigarh

To promote ease of doing business for the newly-incorporated Micro, Small and Medium Enterprises (MSMEs), the Punjab Government on Monday okayed an ordinance to bring in the Punjab Right to Business Act-2019 and Punjab Right to Business Rules-2019.

The move is aimed at reducing the regulatory compliance burden by waiving off the requirement of certain approvals and inspections for establishment and operations for MSMEs in the State while introducing the provision of self-declaration.

Sanction of building plans, issuance of completion or occupation certificate for buildings, application for fire NOC, Registration of Trade License, besides Change of Land use, approval of factory building plan and registration of shop or establishment, are major services covered under the Act.

Notably, Punjab is home to approximately two lakh MSME units, which are one of the most important pillars of the industrial growth.

Under the new ordinance, a State Nodal Agency under Director Industries and Commerce will be set up to monitor and supervise the overall functioning of the district level nodal agency, to be headed by the Deputy Commissioners.

The Deputy Commissioners have been designated as Chief Executive Officers of the District Bureaus of Enterprise, to be set up across the State, which would act as district-level nodal agencies operating under overall superintendence of the State Government and the state nodal agency.

Under the Act, the district level nodal agency would assist MSME enterprises in maintaining record of ‘Declaration of Intent’ received, and issue ‘Certificate of In-principle Approval’ to the new enterprise, being set up in approved industrial park.

For MSME units proposed outside the approved industrial park, the decision on issuance of ‘Certificate of In-Principle Approval’ would be taken by the District Level Nodal Agency within a period of 15 working days. punjab currently has approximately 2 lakh MSME units.



To further strengthen the state’s investment climate and boost employment generation, the Punjab Cabinet has approved various amendments to the Factories Act, 1948, Industrial Disputes Act, 1947, and the Contract Labour (Regulation and Abolition) Act, 1970.

Official spokesperson said that the Cabinet has given its nod to amendments to section 2 (m) (i), 2 (m) (ii), 85, Section 56, Section 59, Section 65(3) and Section 105, as well as insertion of new section 106 B, in the Factories Act, 1948, through promulgation of an ordinance.

“The ordinance will increase the threshold limit of number of workers from ‘10’ and ‘20’ to ‘20’ and ‘40’, in factories with manufacturing processes being carried out with or without the aid of power, respectively. “This will help promote establishment of small manufacturing units to create more employment opportunities for workers. Consequently, the existing Section 2 m (i), 2 m(ii), 85, 56 and 65(3)(iv) of the Act are proposed to be amended,” said the spokesperson.

The need for increasing the total number of hours of work on overtime in quarter is based on the demand from industries so that factories can carry out the work on urgent basis.

Further, the existing sub-section(1) of section 105 is proposed to be amended to the effect that cognizance of any offence shall be taken by the Court on complaint made by an Inspector only after obtaining previous sanction in

writing from the State Government.

Under the existing provisions of Act, there is no provision for compounding of offences, resulting in high number of prosecution cases. For speedy disposal of offences and to minimize litigation, a new provision, that is section 106 B is proposed to be inserted for compounding of offences.

In another decision, the Cabinet approved amendment to Section 25K (1) to increase the minimum number of workers for applying the provisions relating to layoffs, retrenchment and closure from 100 to 300, while ensuring a minimum notice period of three months.

Cabinet further approved amendment to sub clause (a) and (b) of clause 4 of section 1 of the Contract Labour (Regulation and Abolition) Act, 1970 aimed at giving fillip to employment generation in the State by enhancing the ambit of the Act from present threshold limit of 20 to 50 workers.

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