For ease of liquidity & business, government to amend MSME Act
The Indian government has introduced the MSME Development (Amendment) Bill, 2026, to improve liquidity for small businesses by mandating digital invoicing through the TReDS platform. The bill also aims to expedite payment dispute resolutions and simplify registration processes for MSMEs working with public sector undertakings.
Why it matters
By addressing chronic payment delays and working capital shortages, these reforms aim to stabilize the MSME sector, which serves as a critical engine for India's economic growth and employment.
NEW DELHI: Small businesses supplying goods and services to central public sector undertakings (CPSUs) will get their dues cleared faster under proposed amendments to the MSME Development Act, 2006, introduced in Parliament Tuesday, that seek mandatory digital invoicing, stronger protection against delayed payments and faster settlement of disputes.The move is aimed at improving liquidity and reducing the long waiting period that often leaves small businesses short of working capital despite having completed their supplies or services.The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, seeks to update the Act of 2006 by simplifying registration and compliance, strengthening payment-related safeguards and decriminalising certain offences.
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