FISME, Egrow Foundation Discuss Key Reforms Under MSMED Amendment Bill 2026

New Delhi, Aug 31 (KNN) The Federation of Indian Micro and Small & Medium Enterprises (FISME) and Egrow Foundation jointly organised a webinar on August 28 to discuss the MSMED Amendment Bill, 2026.

The experts highlighted delayed payments, TReDS, MSME classification and dispute resolution among the key changes proposed under the legislation.

FISME Secretary General Anil Bhardwaj said MSMEs are central to India's employment challenge, particularly as the country adds around one crore young people to its workforce every year and emerging technologies such as artificial intelligence make large-scale job creation more difficult.

He said strengthening MSMEs could provide a key pathway for generating employment, given their contribution to production, exports, economic activity and forward and backward linkages.

MSMEs Seen As Key To India's Employment Challenge

The webinar underscored MSMEs’ role in employment, production, exports and economic activity, while highlighting delayed payments as a major constraint on growth. Speakers noted that unpaid receivables lock up working capital needed for production, hiring and expansion.

Around 80 percent of annual delayed-payment amounts are estimated to be owed to MSMEs, with total receivables pegged at nearly Rs 10.7 lakh crore (about USD 130 billion). 

The issue often starts at the contracting stage, with unfavourable payment terms, invoice delays and the absence of formal contracts making recovery difficult.

MSMED Framework Gets Key Reforms

Speakers said the existing MSMED Act, 2006, required changes to reflect economic and technological developments over the past two decades.

TReDS, operational since 2017, was not explicitly incorporated into the earlier legislative framework, while delays in proceedings and enforcement of awards by Micro and Small Enterprises Facilitation Councils (MSEFCs) also created challenges.

The emergence of Online Dispute Resolution (ODR) was another development requiring legislative recognition, speakers noted.

Key Amendments Proposed Under Bill

Key provisions discussed included flexible MSME classification, allowing the Centre to revise investment and turnover thresholds through notification; free, voluntary digital registration through a national platform linked to Udyam; and mandatory TReDS settlement for central and state public sector enterprises, along with transaction disclosures.

The amendments also seek to strengthen the MSEFC through revised timelines and award enforcement mechanisms, introduce an Online Dispute Resolution (ODR) framework, decriminalise specified offences with graded penalties, and recognise MSME delayed-payment dues as enforceable debt under the Insolvency and Bankruptcy Code.

TReDS Positioned As Working Capital Solution

Speakers highlighted the proposed legislative integration of TReDS as a key measure to ease MSME liquidity constraints. 

Mandatory routing of eligible invoices through RBI-authorised TReDS platforms would enable MSMEs to access invoice financing instead of waiting for buyer payments, improving working-capital flows and increasing transparency in public-sector transactions. 

MSME Policy Framework Evolves With Digital Economy

The webinar also traced the evolution of India's MSME policy framework, from the earlier Small Scale Industries regime and delayed-payment legislation to the MSME Development Act and the latest proposed amendments, underscoring the need for the legal framework to keep pace with changing business, financing and digital ecosystems.

(KNN Bureau)