Sections 29 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 29 and 30 of the MSMED Act give the Central Government and the State Governments the power to make rules to carry out the Act. Section 31 let the Central Government make an order to remove difficulties in giving effect to the Act, but only within two years of its commencement. These three sections explain where the working detail of the Act comes from, and why the Facilitation Council's composition is fixed by each State and not by the Act itself.
Section 29: the Central Government may make rules by notification on the Board, the Member-Secretary, the Fund, the information officers may demand, and any matter the Act says is prescribed; these are laid before Parliament for thirty days. Section 30: the State Government makes rules on the composition of the Micro and Small Enterprise Facilitation Council and its procedure, laid before the State Legislature. Section 31: orders to remove difficulties could not be made after two years from commencement.
Section 29: rules by the Central Government
Section 29(1) says the Central Government "may, by notification, make rules to carry out the provisions of this Act". Section 29(2) then lists matters "in particular, and without prejudice to the generality of the foregoing power". The list is illustrative, not a fence: clause (f) picks up "any other matter which is to be or may be prescribed under this Act".
| Clause | Matter the rules may provide for | Section it serves |
|---|---|---|
| 29(2)(a) | Term of office of Board members, filling of vacancies, procedure of members in the discharge of functions | Section 3(4) |
| 29(2)(b) | Powers and functions of the Member-Secretary | Section 6 |
| 29(2)(c) | The manner in which the Fund may be administered | Section 14(1) |
| 29(2)(d) | Criteria on which sums may be released | Section 14(3) |
| 29(2)(e) | Information to be furnished, and its form | Section 26(2) |
| 29(2)(f) | Any other matter to be or that may be prescribed | Anywhere in the Act |
The Board side of this is explained in our post on sections 4, 5 and 6; the Fund side in sections 12, 13 and 14. The information power in clause (e) connects to section 26(2), which lets appointed officers require any person to furnish information "in such form, as may be prescribed".
Laying before Parliament: section 29(3)
Two things must be laid before each House of Parliament "as soon as may be after it is made": every notification issued under section 9, and every rule made by the Central Government under section 29. The laying is "for a total period of thirty days which may be comprised in one session or in two or more successive sessions".
If, before the expiry of the session immediately following, both Houses agree in making a modification, or agree that the notification or rule should not be made, it has effect only in the modified form, or no effect. The section adds that any modification or annulment is "without prejudice to the validity of anything previously done under that notification or rule".
Note what section 29(3) does not mention. It names section 9 notifications and section 29 rules. It does not list notifications under section 7 or section 8(3), which is the power behind the classification and Udyam notifications. Those are made under their own provisions; see our post on section 7(9). This article does not say whether they must be laid, because section 29(3) is silent on them.
Section 30: rules by the State Government
Section 30(1) reads: "The State Government may, by notification, make rules to carry out the provisions of this Act." Section 30(2) lists, again without prejudice to the general power:
- Clause (a): the composition of the Micro and Small Enterprise Facilitation Council, the manner of filling vacancies of members, and the procedure to be followed by members in the discharge of their functions under section 21(3);
- Clause (b): any other matter which is to be, or may be, prescribed under the Act.
This is why the Council is a State matter. Sections 20 and 21 of the Act establish the Councils and set out their basic composition; the finer points are left to State rules. Read our post on sections 20 and 21 for the statutory composition, and how a dispute moves through the MSEFC for the process. If your dispute is before a Council, the State rules for that State, and not only the Act, decide matters such as how members fill vacancies and how they conduct proceedings. If a question turns on which State rule applies, our legal consultation page explains how we assist.
Under section 30(3), a rule made by the State is laid "before each House of the State Legislature where there are two Houses, and where there is one House of the State Legislature, before that House". Unlike section 29(3), no fixed thirty-day period or procedure for modification is stated in section 30(3).
Section 31: removal of difficulties
Section 31(1) gave the Central Government a limited power: "If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty".
| Feature | What the text says |
|---|---|
| Who | The Central Government |
| Form | An order published in the Official Gazette |
| Limit | Provisions "not inconsistent with the provisions of this Act" |
| Time bar | "no order shall be made under this section after the expiry of two years from the commencement of this Act" |
| Parliament | Every order is laid before each House "as soon as may be" (s.31(2)) |
The two-year proviso means that, by its own terms, the power cannot be used today. The Act commenced in 2006, so any order under section 31 had to be made long ago. You will not see a fresh section 31 order now. If you come across a reference to such an order, it will belong to that early period; this article does not identify any, and none is named in the source text.
Rules, notifications and the Act: keeping them apart
- The Act sets the rights and duties (for example sections 15 and 16 on payment and interest).
- Rules under section 29 or 30 fill in procedure and machinery.
- Notifications under sections 7 and 8(3) set the classification criteria and the form and procedure of the memorandum; the Udyam notification S.O. 2119(E) is one.
- Orders under section 31 were a short-lived tool to iron out early difficulties.
A rule or notification cannot go beyond the Act. If a rule or notification conflicts with the Act, the Act prevails; that is a general principle of delegated legislation and not a line in these sections.
What these sections do not say
- They do not list the actual rules. The content of any rule has to be read in the rule itself.
- Section 29 does not say the State rules must match each other; each State may prescribe its own.
- Section 30(3) does not set a thirty-day laying period.
- Section 31 does not say what difficulties arose, and the source text names no order.
Practical examples
Example 1: a dispute in a State. A small supplier in a State wants to know how many members must sit on the Council hearing its case. The Act gives the structure in sections 20 and 21; the detail of vacancies and procedure under section 21(3) is for that State's rules under section 30(2)(a).
Example 2: an information notice. An officer appointed under section 26(1) asks a person for information under section 26(2). The form is "as may be prescribed", and section 29(2)(e) is the source of the Central rule-making power for that form.
Example 3: a claim that an old order still applies. Someone relies on a removal-of-difficulties order. Section 31(1)'s proviso bars any order after two years from commencement, so the first question is when the order was made.
Need help with MSME rules and legal questions?
If a question turns on which rule, notification or State procedure applies to your case, it helps to have the exact text in front of you before you act. Our legal consultation team can go through the provision with you.
Key takeaways
- Section 29(1) lets the Central Government make rules by notification to carry out the Act; section 29(2) lists matters without limiting the power.
- Rules and section 9 notifications are laid before Parliament for thirty days (s.29(3)).
- Section 30 lets each State make rules, including on the composition and procedure of the Facilitation Council (s.30(2)(a)).
- Section 31's power to remove difficulties could not be used after two years from commencement.
- The classification and Udyam notifications come from sections 7 and 8(3), not from section 29.
Read next
- Sections 27 and 28 of the MSMED Act, 2006: Penalties and jurisdiction of courts
- Section 7 of the MSMED Act, 2006: Power to vary classification criteria
- Paragraph 1 of the Udyam Notification (S.O. 2119(E)): Classification of enterprises
- MSME Facilitation Council (MSEFC): Dispute Resolution Process
Disclaimer: Based on the Micro, Small and Medium Enterprises Development Act, 2006 (official text, not amended by the Jan Vishwas Acts of 2023 or 2026) and the Udyam notifications S.O. 2119(E) of 26 June 2020 and S.O. 1364(E) of 21 March 2025, read with later developments noted in the article, as on 30 September 2026. Notifications, rules and the Udyam portal change; verify the current position before acting.