The Micro, Small and Medium Enterprises Development Act, 2006 is an Act of the

Parliament of India The Parliament of India (International Alphabet of Sanskrit Transliteration, IAST: ) is the supreme legislative body of the Republic of India. It is a bicameralism, bicameral legislature composed of the president of India and two houses: the R ...

. According to the act, "any buyer who fails to make payment to MSMEs, as per agreed terms or a maximum of 45 days, would be liable to pay monthly compounded interest at three times the bank rate notified by RBI". Industries are divided into 2 categories. Manufacturing and services. They are further divided into micro, small and medium. For both, manufacturing and services sectors, micro industries' capital requirements are under 1 Crore rupees and an annual turnover of less than 5 Crore rupees. Small industries shall have cis 50 and 250 Crores respectively.

References

2. What's MSME , Ministry of Micro, Small & Medium Enterprises Acts of the Parliament of India 2006 {{India-law-stub