+
New MSME Bill to Speed Payments and Cut Delays
ECONOMY & POLICY

New MSME Bill to Speed Payments and Cut Delays

The Centre introduced the Micro, Small and Medium Enterprises Development Amendment Bill, 2026 to reduce payment delays and speed dispute resolution for smaller businesses. The proposed law seeks to remove minor penalties for micro, small and medium enterprises and modernise provisions that date from 2006, the union minister for MSME said when presenting the bill in the Rajya Sabha. It will require government procurers to pay MSME suppliers only through certified Trade Receivables Discounting System platforms and enable states to adopt similar arrangements for their entities. The measure is designed to streamline receivables realisation and lower litigation delays.

The MSME ministry on 10 July directed all central public sector undertakings to clear MSME invoices only on TReDS platforms; five platforms approved by the Reserve Bank of India are operational: RXIL, M1xchange, Invoicemart, C2treds and DTX. The shift follows a budget move to allow receivables to be used as asset-backed securities, a long-standing demand from a sector that contributes 31.1 per cent to India's GDP and 48 per cent of exports. The bill also permits states to set up additional micro and small enterprises facilitation councils to authenticate complaints and steer parties to out-of-court settlement.

Timelines in the draft legislation aim to ensure faster adjudication of delayed payment disputes involving micro and small enterprises. According to the MSME Samadhaan portal, more than 103,000 payment-related complaints amounting to over Rs 290 billion (bn) have been filed since 2017. India has 87 million (mn) registered MSMEs, which contribute about 30.1 per cent to GDP, account for 35.4 per cent of manufacturing output and nearly 45 per cent of trade. There were 161 facilitation councils in the country as of March 2025.

The proposed law includes provisions to ensure parties to disputes retain working capital during delays and gives courts power to direct 50 per cent payment to MSME suppliers when resolution exceeds six months. Officials expect the measures to reduce reliance on prolonged litigation and improve cash flows for suppliers. Implementation will depend on state uptake and facilitation council capacity to process complaints.

The Centre introduced the Micro, Small and Medium Enterprises Development Amendment Bill, 2026 to reduce payment delays and speed dispute resolution for smaller businesses. The proposed law seeks to remove minor penalties for micro, small and medium enterprises and modernise provisions that date from 2006, the union minister for MSME said when presenting the bill in the Rajya Sabha. It will require government procurers to pay MSME suppliers only through certified Trade Receivables Discounting System platforms and enable states to adopt similar arrangements for their entities. The measure is designed to streamline receivables realisation and lower litigation delays. The MSME ministry on 10 July directed all central public sector undertakings to clear MSME invoices only on TReDS platforms; five platforms approved by the Reserve Bank of India are operational: RXIL, M1xchange, Invoicemart, C2treds and DTX. The shift follows a budget move to allow receivables to be used as asset-backed securities, a long-standing demand from a sector that contributes 31.1 per cent to India's GDP and 48 per cent of exports. The bill also permits states to set up additional micro and small enterprises facilitation councils to authenticate complaints and steer parties to out-of-court settlement. Timelines in the draft legislation aim to ensure faster adjudication of delayed payment disputes involving micro and small enterprises. According to the MSME Samadhaan portal, more than 103,000 payment-related complaints amounting to over Rs 290 billion (bn) have been filed since 2017. India has 87 million (mn) registered MSMEs, which contribute about 30.1 per cent to GDP, account for 35.4 per cent of manufacturing output and nearly 45 per cent of trade. There were 161 facilitation councils in the country as of March 2025. The proposed law includes provisions to ensure parties to disputes retain working capital during delays and gives courts power to direct 50 per cent payment to MSME suppliers when resolution exceeds six months. Officials expect the measures to reduce reliance on prolonged litigation and improve cash flows for suppliers. Implementation will depend on state uptake and facilitation council capacity to process complaints.

Related Stories

Gold Stories

Next Story
Products

Interio by Godrej launches modular workplace solutions

Interio by Godrej has launched Workscapes, a modular workplace solutions category designed to help organisations configure and adapt workspaces to changing requirements. The portfolio combines mobile and compatible furniture and support elements that can be rearranged across different work modes without changes to fixed layouts.Workscapes includes Collaboration Tables, Privacy Solutions, Mobile Markerboards and Space Dividers, Power Solutions, Storage and Support Elements, Meeting and Presentation Tools, and Seating Elements. The range is designed for focused work, collaboration, informal disc..

Next Story
Infrastructure Urban

CAFE-III Gives Auto Industry Investment Clarity

The government’s new Corporate Average Fuel Economy (CAFE-III) norms have provided the automobile industry with a clearer framework for technology investments, according to industry representatives. The framework seeks to balance environmental objectives with flexibility for manufacturers while encouraging the adoption of flex-fuel vehicles and biofuels. Society of Indian Automobile Manufacturers (SIAM) President Shenu Agarwal said the five-year framework would give automakers greater predictability to plan investments and accelerate innovation. He said the regulation established annual targ..

Next Story
Infrastructure Energy

Mines Ministry to Auction Two Offshore Mineral Blocks in Andaman Sea

The Ministry of Mines will launch an auction of two offshore mineral blocks in the Andaman Sea on Thursday, seeking to unlock India’s offshore mineral potential and strengthen long-term mineral resource security. The blocks will be offered under a composite licence, which permits exploration and development activities in accordance with the applicable regulatory framework. The ministry said the auction was intended to encourage systematic exploration, attract investment and promote the use of advanced technologies for offshore mineral exploration and development. The initiative is also aimed..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code