Context
Parliament has passed the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, amending the MSMED Act, 2006. It seeks to formalise enterprises, expedite delayed-payment disputes and improve ease of doing business.
Explanation
- MSMEs are classified using the twin criteria of investment and annual turnover.
- Udyam Registration is a free, digital and voluntary registration system.
- Micro and Small Enterprises Facilitation Councils (MSEFCs) adjudicate delayed-payment disputes.
- The Bill provides Online Dispute Resolution and time-bound mediation and arbitration.
- Awards may be recovered as arrears of land revenue.
- Trade Receivables Discounting System (TReDS) facilitates invoice discounting and liquidity; its use becomes compulsory for Central Public Sector Enterprises.
- Specified criminal penalties are replaced with graded civil penalties, promoting decriminalisation.
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MSMED Amendment Bill 2026: Reforming MSME Governance