The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 is a legislative Bill introduced in the Parliament of India, specifically in the Rajya Sabha on July 28, 2026, which seeks to amend the principal Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The original MSMED Act, 2006 was enacted to facilitate the promotion and development of MSMEs. The 2026 Bill was introduced to modernize the legal framework, improve liquidity, and address the persistent problem of delayed payments to MSMEs.
The Bill works by introducing several key changes to the MSMED Act, 2006. It replaces the fixed statutory investment thresholds for MSME classification with a system that empowers the Central Government to classify enterprises based on both investment in plant and machinery/equipment and turnover via notification. It makes MSME registration voluntary for all enterprises and provides permanence to the Udyam Registration Portal as a free, national digital platform. A major provision is the mandatory settlement of all invoices for goods or services procured from MSMEs by Central Public Sector Enterprises (CPSEs) through the Trade Receivables Discounting System (TReDS), an RBI-regulated electronic platform. To strengthen dispute resolution, the Bill mandates courts to order the payment of at least 50% of the awarded amount to the micro and small enterprise suppliers if the buyer's application to set aside the award is pending for more than six months. Furthermore, it decriminalizes certain offences, such as wilful furnishing of false information for registration, replacing fines with a warning for the first contravention and a penalty between Rs 1,000 and Rs 50,000 for subsequent contraventions. The Bill was passed by the Rajya Sabha on August 3, 2026, and the Lok Sabha on August 7, 2026.