Union Minister Jitan Ram Manjhi speaks in the Lok Sabha during the Monsoon session of Parliament, in New Delhi on Friday. (Sansad TV/ANI Video Grab) | Photo Credit: ANI

The Lok Sabha approved the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, on Friday, aimed at strengthening the framework for resolving delayed payment disputes and enhancing ease of doing business for the sector, after it had been passed by the Rajya Sabha earlier this week.

The Bill amends the MSME Development Act, 2006, with the objective of addressing one of the sector’s biggest concerns —delayed payments — while simplifying the dispute resolution process, improving liquidity for small businesses and enhancing the ease of doing business.

The Lok Sabha passed the legislation without a debate amid continued protests by Opposition members over various issues. The Bill had been approved by the Rajya Sabha on August 3 and has now completed its passage through Parliament.

According to the government, the amendments seek to strengthen the administrative framework governing MSMEs and introduce a more efficient mechanism for settlement of payment disputes. “Its objective is to balance the interests of all concerned parties while maintaining constitutional principles and the interests of businesses,” MSME Minister Jitan Ram Manjhi had told the Rajya Sabha on August 3.

Manjhi also pointed out that the outstanding credit disbursed to MSMEs, which stood at ₹10 lakh crore in 2014-15, had now increased to over ₹38.35 lakh crore, demonstrating that credit flow to MSMEs was rising steadily

A key feature of the legislation is the introduction of strict timelines for adjudication of delayed payment cases to ensure faster resolution. The Bill also provides for recovery of settlement agreements reached between buyers and MSME suppliers, addressing a longstanding concern over enforceability and improving liquidity for small enterprises.

The legislation also empowers courts to direct buyers to deposit at least 50 per cent of the amount awarded to an MSME supplier if an application to set aside an order remains pending for more than six months. The provision is intended to discourage prolonged litigation that often delays payments to small businesses.

Published on August 7, 2026