Keep national policy advice distinct from MSE Facilitation Council adjudication and an individual grant sanction.
Published by Finin2min · Source review: 24 October 2026
Rules, conditions and exceptions
- Section3 establishes the National Board with its head office at Delhi. The Union minister responsible for MSMEs is ex-officio Chairperson; the Vice-Chairperson branch follows the statutory minister/appointment arrangement.
- The composition includes the specified State ministers, parliamentarians, Union Territory administrator, officials, financial institutions, enterprise associations, eminent persons and trade-union representatives. It is not a board chosen by one individual supplier or buyer for its invoice dispute.
- Among the twenty association representatives, the Act requires not fewer than three representing women’s enterprise associations and not fewer than three representing micro-enterprise associations. Among the three eminent persons, at least one must be a woman. These are different membership categories.
- Section3(6) requires a meeting at least once in every three months in a year. Section3(8) separately requires specified invited State/UT and association participation in at least two meetings; the two-meeting invitation rule is not the Board’s overall meeting frequency.
- The Board may associate advisers for the relevant purpose; such an associated person can participate in relevant discussion but has no voting right by that association alone. Ex-officio tenure follows the underlying office; other terms/vacancies/procedure are prescribed.
- Section4 lists removal grounds. For the stated inability/refusal, moral-turpitude conviction and abused-position grounds in clauses(c)-(e), a reasonable opportunity of being heard is required. Do not convert every allegation into automatic removal.
- Section5 concerns examining policy factors/programmes, recommendations and advice on the section 12 funds, subject to Central Government directions. It is not the section 18 invoice adjudicator, an individual refund tribunal or a promise of automatic credit/grant. Section6 leaves Member-Secretary functions to the prescribed framework.
Provision map
| Provision | Subject or calculation | Primary source |
|---|---|---|
| 3 | Establishment,composition and meeting requirements | PDF page 4 |
| 4 | Removal grounds and specified hearing protection | PDF page 6 |
| 5 | Policy examination,recommendations and fund advice | PDF page 6 |
| 6 | Prescribed Member-Secretary powers/functions | PDF page 6 |
Worked example
An enterprise association proposes an infrastructure or training policy change to the National Board. An unpaid-invoice claim belongs to its separate statutory dispute route. A recommendation discussed at a Board meeting is neither an MSEFC award nor an individual grant-sanction letter.
Questions answered
Does the Board only have to meet twice each year?
No. Section3(6) requires at least one meeting in every three months. The separate two-meeting provision concerns invited participation.
Can an associated adviser vote merely because invited to assist?
No. The association provision permits the stated discussion participation but does not confer that voting right.
Does section 5 give the Board power to issue an individual invoice award?
No. Its listed functions are policy examination, recommendations and fund advice; the Council dispute mechanism is separate.
Primary sources
- Micro, Small and Medium Enterprises Development Act 2006: India Code text. Sections3-6; PDF pages4-6.
Source review24October 2026. This guide explains the identified provisions and primary judgments. Its illustrations do not decide an individual matter or replace an operative court order.