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.

Punjab Right to Business Bill, 2020

• 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 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.
• 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.
• How the law actually works on the ground remains to be seen, however.

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