Rajya Sabha passes MSME bill to fast-track payments, dispute resolution
With an aim to strengthen Ministry of Micro, Small and Medium Enterprises (MSME) environment in India, Rajya Sabha has passed a bill that seeks to tackle the issue of delayed payments to MSMEs by prescribing timelines to ensure faster adjudication of disputes, provide recovery of the settlement agreement, and address their liquidity issues. Highlighting advantages of the proposed legislation for the sector and various sections of society, Union Minister for MSME Jitan Ram Manjhi said that bill seeks to address the current challenges faced by the MSME sector by improving the administrative structure and facilitating payment mechanisms.
Moreover, he reiterated government’s commitment to the development of the MSME sector, and said that the bill aims to balance the interests of all concerned parties while maintaining constitutional principles and the interests of businesses. Further, the proposed legislation seeks to provide recovery of the mediated settlement agreement or the arbitral award as arrear of land revenue. The bill also proposes to decriminalise offences regarding contravention of certain provisions, replacing conviction-based fines with graded penalties by including a warning at the first instance. Besides, it provides for notifying a national digital platform for free and voluntary registration of micro, small and medium enterprises.
Underscoring the importance of MSME sector, the minister described the sector as the backbone of the economy, which contributes significantly to the country's manufacturing and exports. He added that MSMEs contribute 31% to India's GDP, 36% to the country's manufacturing and 41% to its exports. He also highlighted the steadily rising credit flow to MSMEs saying outstanding credit disbursed to MSMEs, which stood at Rs 10 lakh crore in 2014-15, has increased to over Rs 38.35 lakh crore this year.
