Micro Small and Medium Enterprises (MSME) Development (Amendment) Bill, 2026
The Rajya Sabha passed the MSME Development (Amendment) Bill, 2026, which seeks to amend the MSME Development Act, 2006, to address delayed payments and improve the economic environment for MSMEs.
Objectives and Importance
- Introduces timelines for faster dispute resolution and strengthens mechanisms for recovery.
- Aims to improve liquidity for small businesses.
- Balances the interests of all parties while adhering to constitutional principles.
Contribution of MSME Sector
- Accounts for around 31% of the country’s GDP.
- Contributes 35% to manufacturing output.
- Responsible for nearly 48% of exports.
Key Provisions
- Empowers courts to mandate buyers to deposit at least 50% of the award amount to an MSME supplier if the award is challenged and remains pending for over six months.
- Makes provisions for the recovery of mediated settlement agreements and arbitral awards as arrears of land revenue.
- Enables state governments to recover dues through district collectors, deputy commissioners, or other notified authorities based on the location of the buyer’s assets.
