Govt to amend 2006 Act to streamline disputes over delayed payments to MSMEs

“The Act has a lot of issues that need to be handled, including delayed payments and the kind of support MSMEs need. The Act was brought in 2006, and times have changed. The nature of support needed has also undergone a vast difference. Similarly, when it comes to the National Board for MSME, it should have representation of all the secretaries from states because the industry has to connect with state governments at the ground level,” Vinod Kumar, President of the Indian SME Forum, told The Indian Express. Kumar participated in the event organised by the ministry as a panellist.

At the event, Union Minister for MSME Jitan Ram Manjhi emphasised the need to focus on micro enterprises in rural areas to improve quality of life and address unemployment. “When we talk about the rich and the poor, we admit that today 70 per cent of the population falls below the poverty line. Of these people, 90 to 95 per cent are somehow managing their lives. We are very fortunate to have a prime minister like Narendra Modi who is able to understand the problems of these people and wants to work for them. The development of micro industries is very important for this,” Manjhi said in his address.

Manjhi also identified six pillars on which the ministry will focus going forward, namely formalisation and access to credit, increased access to market and e-commerce adoption, increased productivity through modern technology, enhancing skill levels and digitalisation in the service sector, support to khadi, rural, and coir industries, and empowerment of women and artisans through enterprise creation.

At the event, the ministry also announced the Trade Enablement & Marketing (TEAM) initiative, which aims to onboard 5 lakh MSEs onto the Open Network for Digital Commerce (ONDC). The initiative, with an outlay of Rs 277 crore over the next three years, also seeks to assist MSEs with cataloguing, account management, logistics, and packaging material and design. The ministry also announced the Yashasvini campaign to spread awareness for formalising women-owned, informal micro enterprises, with a focus on tier-2 and tier-3 cities.

During the event, Ateesh Kumar Singh, Joint Secretary at the MSME ministry, revealed that the ministry is upgrading the Samadhaan portal from a simple tracker to a comprehensive full-stack online platform for resolving delayed payment disputes. The portal was launched in 2017 for the monitoring of outstanding dues to MSEs from buyers of goods and services. “Today, the Samadhaan portal primarily provides information for analysis. It does not offer a platform for direct resolution. To improve this, the portal needs to incorporate online dispute resolution mechanisms. Users should be able to file complaints, have notices sent to the other party, receive responses, and participate in mediation or other resolution processes—all online,” explained Kumar.

Panellists at the event also highlighted numerous problems with the current process, including the high cost of litigation for MSEs and delays in resolution. They suggested enforcing timelines and capping arbitration expenses to make the process more affordable for MSEs.