Rajya Sabha Passes MSME Bill for Faster Payments & Dispute Resolution
By ThePip Desk
India’s Rajya Sabha approves new MSME bill to streamline payments, resolve disputes, and tackle liquidity challenges for small and medium enterprises.
India’s Rajya Sabha has approved a significant bill aimed at fortifying the Micro, Small and Medium Enterprises (MSME) sector.
This legislation seeks to address the persistent issue of delayed payments to MSMEs by establishing clear timelines for dispute adjudication and facilitating the recovery of settlement agreements, thereby tackling their liquidity challenges.
Key Provisions to Bolster MSMEs
The proposed legislation introduces several mechanisms to improve the administrative structure and payment processes for MSMEs.
It provides for the recovery of mediated settlement agreements or arbitral awards as arrears of land revenue, ensuring enforcement.
The bill also proposes to decriminalise offences related to certain contraventions, shifting from conviction-based fines to a system of graded penalties that includes a warning for first-time instances.
Furthermore, it mandates the notification of a national digital platform, offering free and voluntary registration for micro, small, and medium enterprises.
Government Commitment and Sectoral Impact
Union Minister for MSME, Jitan Ram Manjhi, reiterated the government’s unwavering commitment to the MSME sector’s development.
He emphasized the bill’s objective to balance the interests of all stakeholders while upholding constitutional principles and business interests.
Manjhi underscored the MSME sector’s role as the backbone of the Indian economy, highlighting its substantial contributions across various segments.
MSME’s Economic Contributions
The sector’s economic footprint is considerable, demonstrating its critical importance to national growth.
MSMEs contribute 31% to India’s Gross Domestic Product (GDP).
They account for 36% of the country’s manufacturing output.
Their share in India’s total exports stands at 41%.
The outstanding credit disbursed to MSMEs has seen significant growth, rising from Rs 10 lakh crore in 2014-15 to over Rs 38.35 lakh crore this year.
This new bill is poised to strengthen the operational environment for MSMEs, ensuring more efficient payment cycles and dispute resolution, which are vital for their continued growth and contribution to the Indian economy.