MSME Amendment Bill Widens Definition,
Public Sector to Route Time Bound Payment Though Online, but Government
Departments Not Covered
MSME Amendment Bill, 2026
proposes digital registration, mandatory TReDS
payments, revised enterprise classification and faster dispute resolution
·
The Micro, Small and Medium Enterprises
Development (Amendment) Bill, 2026 was introduced in the Rajya Sabha on
28 July 2026 to amend the Micro, Small and Medium Enterprises
Development Act, 2006.
Key
Amendments
·
Development Commissioner defined
o
A new definition of "Development
Commissioner" is inserted to identify the administrative head of the
Office of the Development Commissioner in the Ministry of MSME.
·
Revised classification of MSMEs
o
The Central Government will classify micro, small
and medium enterprises through notification based on:
§ Investment
in plant and machinery or equipment; and
§ Turnover.
o
Certain specified investments, such as
pollution-control equipment, R&D and industrial safety devices, may be
excluded while calculating investment.
·
Digital registration platform
o
The Central Government will establish a national
digital platform for free and voluntary registration of MSMEs.
o
State Governments may also create their own digital
registration platforms to enable MSMEs to access State-level benefits.
·
Mandatory invoice settlement through TReDS
o
Every Central Public Sector Enterprise (CPSE)
must route settlement of invoices for procurement from MSMEs through the Trade
Receivables Discounting System (TReDS) platform
authorised by the RBI.
o
The Central Government may extend this requirement
to other public authorities or entities.
o
State Governments may similarly notify State PSUs
and other entities to use TReDS.
·
Definition of TReDS
o
The Bill defines Trade Receivables Discounting
System (TReDS) as an electronic platform
facilitating financing or discounting of MSME trade receivables in accordance
with RBI guidelines.
·
Time-bound dispute resolution
o
Amendments to Section 18 provide:
§ Mediation
must be completed within 90 days from the first appearance.
§ After
mediation ends, the MSME Facilitation Council must proceed further within 30
days.
Objectives
of the Bill
·
Improve ease of registration for MSMEs through
digital platforms.
·
Ensure faster realization of payments by expanding
use of TReDS.
·
Strengthen MSME access to Government schemes.
·
Make MSME classification more flexible through
notification.
·
Expedite resolution of payment disputes through
prescribed timelines.