Rajya Sabha passes MSME bill to curb payment delays

New Delhi: The Rajya Sabha on Monday passed the Micro Small and Medium Enterprises (MSME) Development (Amendment) Bill, 2026, which aims to address delayed payments to MSMEs by introducing timelines for faster dispute resolution, strengthening recovery mechanisms and improving liquidity for small businesses.

The bill seeks to amend the MSME Development Act, 2006.

Replying to the discussion on the bill, Union MSME minister Jitan Ram Manjhi said the proposed amendments would strengthen the administrative framework and streamline payment mechanisms to address key challenges faced by MSMEs. "Its objective is to balance the interests of all concerned parties while maintaining constitutional principles and the interests of businesses," he said.


The minister described the MSME sector as the backbone of the economy. The sector contributes around 31% to the country's gross domestic product, 35% to manufacturing output and nearly 48% to exports.

Among its key provisions, the bill seeks to empower courts to direct buyers to deposit at least 50% of the amount awarded to an MSME supplier if an application challenging the award remains pending for more than six months.

It also provides for the recovery of mediated settlement agreements and arbitral awards as arrears of land revenue, enabling state governments to recover dues through district collectors, deputy commissioners or other notified authorities where the buyer's assets are located.