The Micro, Small and Medium Enterprises Fund Rules, 2016

Published vide Notification No. G.S.R. 1032(E), dated 28th October, 2016

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Ministry of Micro, Small and Medium Enterprises

G.S.R. 1032(E). - In exercise of the powers conferred by clause (c) of sub-section (2) of section 29 of the Micro, Small and Medium Enterprises Development Act, 2006 ( 27 of 2006), the Central Government hereby makes the following rules, namely:-

Short title and commencement.- (1) These rules may be called the Micro, Small and Medium Enterprises Fund Rules, 2016.

(2) They shall come into force on the date of their publication in the Official Gazette.

Definitions.- In these rules, unless the context otherwise requires,-

(a) "Act" means the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006);

(b) "Chairperson" means the Chairperson of the Governing Council of the Fund as referred to in rule 6;

(d) "Fund" means the Micro, Small and Medium Enterprises Fund constituted in accordance with section 12 of the Act;

(e) "Member-Secretary" means the Member Secretary of the Governing Council;

Objective of Fund.- The objective of the Fund shall be promotion, development and enhancing the competitiveness of micro, small and medium enterprises, particularly of the micro and small enterprises.
Administration of Fund.- (1) The Fund shall be under administrative control of the Central Government in the Ministry of Micro, Small and Medium Enterprises.

(2) The day to day affairs of the Fund shall be managed by the Governing Council.

(3) Any money out of the Fund shall be spent only with the approval of the Governing Council.

(4) All moneys standing at the credit of the Fund which cannot be applied immediately shall, with the approval of the Central Government, be deposited in a nationalized Bank.

Composition of Governing Council.- (1) The Governing Council shall consist of the following, namely:-

(a)	Minister in charge of the Ministry of the Micro, Small and Medium Enterprises	- Chairperson ex officio;
(b)	Secretary to the Government of India in the Ministry of Micro, Small and Medium Enterprises	- Member ex officio;
(c)	Additional Secretary and Development Commissioner ( Micro, Small and Medium Enterprises)	- Member ex officio;
(d)	Financial Adviser, Ministry of Micro, Small and Medium Enterprises	- Member ex officio;
(e)	Joint Secretary to the Government of India responsible for Micro, Small and Medium Enterprises in the Ministry of Micro, Small and Medium Enterprises	- Member ex officio;
(f)	Joint Secretary to the Government of India responsible for Agro and Rural Industry in the Ministry of Micro, Small and Medium Enterprises	- Member ex officio;
(g)	two members to be nominated by the Chairperson of the Board (of the National Board for Micro, Small and Medium Enterprises)	- Members;
(h)	Additional Development Commissioner	- Member Secretary.

(2) The quorum of the Governing Council shall be Five members.

(3) The decision of the Governing Council shall be by majority of members present in a meeting.

Approval and release of money from Fund.- (1) The Governing Council shall meet at least once in six months to assess the feasibility of funding the scheme or project or activity.

(2) The Governing Council shall prioritize and approve the projects or schemes or activities on the basis of criteria laid down by it,

(3) The Fund for specific project, scheme or activity shall be approved and released by the Governing Council.

(4) The agency to which the moneys from the Fund has been released shall submit the utilization certificate to the Member Secretary.

Progress reports and review.- (1) A quarterly progress report of all projects, schemes or activities for which money out of the Fund has been released shall reach the Member-Secretary within thirty days of the quarter ending June, September, December and March every year.

(2) The quarterly progress report shall be placed before the Governing Council to apprise them of the progress of various projects, schemes or activities approved for financing under the Fund.

Secretarial support.- A Section headed by the Director in the office of the Development Commissioner (Ministry of Micro, Small and Medium Enterprises) shall, provide such secretarial assistance to the Governing Council as may be considered necessary in managing the affairs of the Fund.
Information on Web portal.- Information relating to all activities of the Fund shall be uploaded on the website of the Ministry of Micro, Small and Medium Enterprises.
Accounts and audit.- (1) The Governing Council shall maintain proper accounts and other relevant records and prepare an annual statement of accounts including the profit and loss account and the balance sheet in such form as may be determined by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Fund shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be reimbursed to him by the Fund.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Fund shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and, in particular shall have the right to demand the production of books, accounts, connected vouchers, documents and papers and inspect any of the offices of the Fund.

(4) The accounts of the Fund as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before both Houses of Parliament.