‘Friends of MSMEs in Parliament’ Lauds MSMED Amendment Bill and Commissions Study on Informal Sector

New Delhi, Aug 6 (KNN) The 12th SAMWAD dialogue with ‘Friends of MSMEs in Parliament’ was convened in New Delhi to deliberate on key issues impacting MSMEs, including the MSMED Amendment Bill and issues concerning the informal sector. It was organized by ‘Friends of MSMEs in Parliament’ and Federation of Indian Micro and Small & Medium Enterprises (FISME), secretariat for the forum. The discussion was chaired by Shri Shankar Lalwani, Chairman and MP, Indore, with Shri Rajendra Agrawal, former MP, Meerut serving as the convener.

MSMED Amendment Bill 2026

Members of Parliament unanimously hailed the Bill as a landmark piece of legislation with potential to address the long-standing issues of delayed payments and liquidity constraints that MSMEs face. Shri Shankar Lalwani noted that key inputs and recommendations from FISME, the apex body of MSMEs in India and secretariat of the forum would help shape the final rules under the Act.

Shri Rajendra Agrawal emphasized that Bill provides expedited timelines for dispute resolution and simplifies enforcement of awards. “Statutory inclusion of invoice settlements by CPSEs and SPSEs through TReDs will significantly improve the working capital position of MSMEs by facilitating faster realization of dues”, said Shri Agrawal.

Shri Sujit Kumar, Member Rajya Sabha representing Odisha, reaffirmed government's commitment to improving ease of doing business. He noted that the proposed Corporate Laws (Amendment) Bill includes the decriminalization of several procedural offences and simplification of listing norms for small stock exchanges. He also assured that the suggestions put forth by FISME on the MSMED (Amendment) Bill would be taken up by the Forum at the appropriate platform.

The discussion highlighted that the proposed changes would empower MSEFCs to issue direct 'Awards,' allowing recovery through arrears of land revenue or the Insolvency and Bankruptcy Code (IBC).

Parliamentarians also emphasized that the decriminalization provisions introduced in the Bill are in line with the Government's ongoing Jan Vishwas initiative, as envisioned by the Hon'ble Prime Minister Shri Narendra Modi, to promote ease of doing business by replacing criminal penalties for minor procedural violations with a trust-based regulatory framework.

Issues Pertaining Informal Sector

The discussion underscored the constraints that prevent transitioning of informal sector to formal sector. Dr. Sanjay Jaiswal, MP from West Champaran, said, “The relaxations under the new labour codes have simplified EPF and ESIC registration norms. The increasing trend of EPF and ESIC filings is a manifestation of the government’s commitment to increasing formalization of the economy.”

Shri Jagdambika Pal, Member of Parliament from Domariyaganj, suggested the creation of a dedicated national portal to track the informality status of enterprises. He noted that such a platform could facilitate better monitoring of enterprises' transition from the informal to the formal sector and support evidence-based policymaking. Shri Devendra Bhole, MP, Akbarpur, observed that industries continue to face compliance burden due to overlapping regulatory requirements imposed by the Central and State Governments.

Shri Atul Garg, MP, Ghaziabad, acknowledged that the number of enterprises and employees has increased. He further stated that the government is working on coming up with a universal health card which could be used at any hospital.

Shri Dharambir Singh, MP, Bhiwani-Mahendragarh highlighted the importance of providing subsidies for electricity and land development, particularly for industries operating on leased land, which often face difficulties in accessing bank finance.

Commissioning of Study on Informal Sector

FISME stressed the lack of a comprehensive national study examining the long-term dynamics of India's informal enterprises. Critical gaps remain in understanding why informal enterprises continue to operate outside the formal economy for decades. A proposal was put forth by FISME to conduct a study under the guidance of ‘Friends of MSMEs in Parliament’ to understand the barriers that informal enterprises face in transitioning to formal sector.

The parliamentarians acknowledged the significance and need of formalization for India’s economic growth and agreed to commission a study to examine the issues of informal sector and identify pathways for their transition into the formal economy.

A two-member committee comprising of forum’s members- Shri Sujit Kumar and Dr. Sanjay Jaiswal, agreed to guide the proposed study. FISME will prepare the Terms of Reference (ToR) and present it before the Forum for its consideration and approval.

Participating MPs in the discussion

Shri Shankar Lalwani, Chairman and MP (Indore, Madhya Pradesh), Shri Rajendra Agrawal, Convenor and former MP (Meerut, Uttar Pradesh), Shri Jagdambika Pal (Domariyaganj, Uttar Pradesh), Shri Sujeet Kumar (Member Rajya Sabha, Representing Odisha), Dr. Sanjay Jaiswal (West Champaran, Bihar), Shri Shashank Mani Tripathi(Deoria , Uttar Pradesh), Shri Atul Garg (Ghaziabad Uttar Pradesh), Shri Dharambir Singh (Bhiwani-Mahendragarh, Haryana), Shri Devendra Bhole (Akbarpur, Uttar Pradesh), Shri Kamakhya Prasad Tasa (Kaziranga, Assam), Shri Naresh Bansal (Member of Rajya Sabha, Representing Uttarakhand)

About Forum

‘Friends of MSMEs in Parliament’ is a forum of parliamentarians working for the cause of MSMEs and to advocate their interests in the legislative and policy making process. FISME serves as its secretariat. The key objectives of the forum are to ensure that legislation incorporates the MSME perspective, leverage parliamentary institutions for the benefit of MSMEs, facilitate dialogue among the government, institutions and MSMEs, and promote government initiatives for the sector. The discussion was held on 4 August 2026 in New Delhi under ‘SAMWAD – A Dialogue with Parliamentarians’, an initiative of the ‘Friends of MSMEs in Parliament’ and FISME, aimed at fostering constructive engagement between lawmakers and MSME stakeholders.

(KNN Bureau)