Lok Sabha passes MSME Bill: What it means for businesses
What's the story
The Lok Sabha has passed the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026. The legislation was cleared without a debate amid opposition protests. The bill was earlier passed by the Rajya Sabha on August 3. It aims to tackle the problem of delayed payments faced by micro, small and medium enterprises (MSMEs) by improving administrative frameworks and strengthening payment systems.
Legislative details
Bill prescribes timelines for quicker resolution of payment disputes
The MSME Development Amendment Bill, 2026, prescribes timelines for quicker resolution of payment disputes.
It also provides for recovery of settlement agreements and measures to tackle liquidity challenges faced by MSMEs.
The legislation empowers courts to direct payment of at least 50% of the awarded amount to MSME suppliers if an application seeking setting aside an order is pending for over six months.
Economic impact
Outstanding credit to MSMEs grew to over ₹38.35 lakh crore
MSMEs play a vital role in India's economy, contributing 31% to the country's GDP. They also account for 36% of India's manufacturing output and 41% of its exports.
Ahead of the bill's passage in Rajya Sabha, MSME Minister Jitan Ram Manjhi had informed that outstanding credit disbursed to MSMEs has grown from ₹10 lakh crore in FY15 to over ₹38.35 lakh crore now.