Government Bill As Introduced in the Rajya Sabha titled as Micro Small and Medium Enterprises Development Amendment Bill 2026

### Policy Summary: The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 **Document Overview** The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 (Bill No. LXXII of 2026), was introduced in the Rajya Sabha on July 28, 2026. The bill proposes significant amendments to the principal Micro, Small and Medium Enterprises Development Act, 2006, aimed at modernizing the regulatory framework, addressing liquidity issues, and streamlining dispute resolution. **Key Administrative Changes** * **Development Commissioner:** The bill introduces the "Development Commissioner" as the administrative head of the Office of the Development Commissioner of MSMEs within the Ministry of MSME. This role replaces the previously designated "Joint Secretary" in several administrative capacities. * **National Digital Platform:** The Central Government will notify a national digital platform for the free and voluntary filing of registration memorandums. State governments are also empowered to establish State-specific digital platforms. **Classification and Criteria** * **Dual Criteria:** The criteria for classifying enterprises as micro, small, or medium will now consider both: 1. Investment in plant and machinery or equipment. 2. Annual turnover. * **Exclusions:** In calculating investment, costs related to pollution control, research and development, and industrial safety devices are explicitly excluded. **Liquidity and Payment Settlements (TReDS)** * **Mandatory TReDS Routing:** Central Public Sector Enterprises (CPSEs) and State Public Sector Enterprises (SPSEs) are required to route the settlement of invoices for goods or services procured from MSMEs through the Trade Receivables Discounting System (TReDS) platform. * **Compliance Reporting:** CPSEs and SPSEs must disclose the details of MSME invoices routed and settled through the TReDS platform as prescribed by the government. **Dispute Resolution and Facilitation Councils** * **MSE Facilitation Councils:** State Governments are mandated to establish these councils, consisting of 3 to 5 members. The Chairperson must be an officer not below the rank of Joint Director. * **Mediation Timelines:** Mediation services must complete the process within 90 days from the date of the first appearance. * **Online Mechanisms:** The bill authorizes the use of audio-video and electronic means for conducting online mediation or arbitration. * **Recovery of Awards:** Mediated settlement agreements or arbitral awards are legally enforceable and can be recovered as arrears of land revenue through District Collectors. * **Appeals:** No application to set aside a decree or award will be entertained unless the applicant (if not a supplier) deposits 75% of the awarded amount. If a case is pending for over six months, the court shall order at least 50% of the deposit to be paid to the supplier. **Penalty Provisions and Adjudication** * **Decriminalization and Warnings:** The bill moves toward decriminalization by issuing a formal warning for the first instance of non-compliance regarding filing information. * **Financial Penalties:** * Subsequent instances of furnishing false information: ₹1,000 to ₹50,000. * Buyer contraventions: ₹10,000 to ₹50,000 for second instances; up to ₹1,00,000 for third or subsequent instances. * **Inflation Adjustment:** Minimum penalty amounts will increase by 10% every three years. * **Adjudication:** The Development Commissioner is appointed as the adjudicating officer. Appeals against orders must be filed within 30 days to the Secretary to the Government of India. **Financial Implications** According to the Financial Memorandum, the Bill is not expected to involve any recurring or non-recurring expenditure from the Consolidated Fund of India. **Contact and Publication Information** * **Introduced by:** Jitan Ram Manjhi (Minister). * **Authority:** Published by P.C. Mody, Secretary-General, Rajya Sabha. * **Date of Introduction:** July 28, 2026. * **Gazette ID:** CG-DL-E-29072026-274898.

Key Entities Referenced