Context: Parliament passed the MSME Development (Amendment) Bill, 2026, amending the MSMED Act, 2006. It seeks to address delayed payments, accelerate dispute resolution, simplify compliance and improve the ease of doing business for MSMEs.
Explanation
- MSMED Act, 2006 provides the statutory framework for promotion, development and competitiveness of Micro, Small and Medium Enterprises (MSMEs).
- MSME classification uses the composite criteria of investment in plant/machinery or equipment and annual turnover.
- Udyam Registration provides free, paperless, self-declaration-based formal recognition; Udyam Assist Platform helps formalise informal micro enterprises.
- TReDS (Trade Receivables Discounting System) is an RBI-regulated electronic platform for financing/discounting MSME trade receivables; the Bill mandates its use by CPSEs for settling MSME invoices.
- MSE Facilitation Councils (MSEFCs) resolve delayed-payment disputes involving Micro and Small Enterprises.
- The Bill introduces time-bound mediation/arbitration, Online Dispute Resolution (ODR), recovery as arrears of land revenue and decriminalisation of specified offences.
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MSME Development Bill: Reforming Delayed Payments