The Rajya Sabha on Monday passed the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026, aimed at addressing delayed payments to MSMEs by ensuring faster dispute resolution and improving recovery of dues. The bill was cleared amid continuous protests and sloganeering by Opposition members over the police action against students protesting the NEET paper leak.
The proposed law introduces timelines for quicker settlement of payment disputes and allows courts to direct buyers to pay at least 50% of the awarded amount to MSME suppliers if an application challenging an order remains pending for more than six months. It also enables recovery of mediated settlements and arbitral awards as arrears of land revenue.Replying to the debate, Union MSME Minister Jitan Ram Manjhi said the bill would strengthen the sector by improving payment mechanisms and administrative processes while balancing the interests of businesses and other stakeholders.
He expressed disappointment over the Opposition’s protests during the discussion.Describing MSMEs as the backbone of the Indian economy, Manjhi said the sector contributes 31% to GDP, 36% to manufacturing and 41% to exports.
He added that outstanding credit to MSMEs has increased from Rs 10 lakh crore in 2014-15 to over Rs 38.35 lakh crore, reflecting improved access to finance.The bill also proposes to decriminalise certain offences under the MSME Act by replacing conviction-based fines with a graded penalty system, including a warning for first-time violations.
Throughout the debate, Opposition MPs repeatedly raised slogans demanding the presence of Home Minister Amit Shah to respond to the police action against students protesting at Jantar Mantar. Their protests continued during the bill’s passage by voice vote.Leader of the House J P Nadda later criticised the Opposition, saying its members had not even supported amendments moved by their own parties.
Several MPs supported the bill while suggesting additional measures such as better cash-flow support, infrastructure assistance, a production-linked incentive (PLI) scheme for MSMEs, and coordinated GST and trade platforms to further strengthen the sector.