Govt Plans MSME Reforms To Improve Liquidity And Ease Compliance

New Delhi, Jul 17 (KNN) The Centre is set to introduce amendments to the MSME Development Act in the upcoming monsoon session of Parliament, aiming to address long-standing challenges faced by micro, small and medium enterprises (MSMEs), particularly in accessing timely payments and finance.

Focus on Faster Payments and Dispute Resolution

According to government officials, the proposed changes seek to improve cash flow by enabling quicker resolution of payment-related disputes. MSMEs, which often operate on thin margins, are heavily dependent on timely payments from buyers. Delays in receiving dues have been a persistent concern, frequently disrupting business operations.

To address this, the government plans to introduce an online dispute resolution mechanism, offering a faster and more cost-effective alternative to traditional legal processes, especially for smaller firms, an official told TOI.

Decriminalisation and Compliance Relief

The amendments also include the decriminalisation of several minor offences under the law. This move is intended to reduce the compliance burden on small businesses and allow them to focus more on growth rather than legal complexities, while still ensuring that serious violations are dealt with appropriately.

Strengthening Udyam Registration

Another key proposal is to provide statutory backing to the Udyam registration portal, which serves as the official platform for MSME recognition. This step is expected to strengthen the system and improve its effectiveness in policy implementation.

Supporting a Key Economic Sector

MSMEs play a crucial role in India’s economy, contributing significantly to employment, exports, and supply chains. The proposed reforms are aimed at creating a more supportive and business-friendly environment, improving liquidity, and enhancing the overall ease of doing business in the sector.

(KNN Bureau)