New Delhi: The ‘MSME Development (Amendment) Bill 2026,’ which provides a way to resolve payment delays faced by micro, small and medium enterprises (MSMEs) and to settle disputes quickly, has been passed in both Houses of Parliament.
Already passed in the Rajya Sabha last Monday, this bill was successfully passed in the Lok Sabha yesterday as well. In the Lok Sabha, the bill was introduced by MSME Minister Jitan Ram Manjhi. The key provisions of this new law, brought in to improve the cash flow of small businesses, are: Central public sector enterprises must mandatorily make all payments for purchases made from small businesses only through the ‘TReDS’ online platform system.
Arbitration for commercial disputes related to MSME enterprises must be concluded within 90 days. If an appeal related to the dispute has been pending in courts for more than 6 months, the courts must immediately release at least 50 percent of the disputed amount to MSME enterprises.
Change in the penalty system
There will no longer be criminal action for errors in small-scale filing and submission of details. Instead, only graded administrative warnings and fines ranging from Rs. 1,000 to Rs. 1,00,000 will be imposed, the bill says. This bill was passed in the Lok Sabha yesterday amid fierce uproar and shouting by the opposition parties.
