The Rajya Sabha on July 28, 2026, issued the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 to further amend the Micro, Small and Medium Enterprises Development Act, 2006.
The following amendments have been stated:
• In section 7 of the principal Act, for sub-section (1), the following sub-section shall be substituted, namely:-
"(1) Notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act, 1951, the Central Government may, by notification, classify the enterprises as micro, small and medium enterprises, having regard to the provisions of sub-sections (4) and (5), and subject to such limits as it may consider necessary as to both of the following criteria, namely:-
(a) investment in plant and machinery or equipment; and
(b) turnover.
Explanation 1. For the removal of doubts, it is hereby clarified that in calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may be specified, by notification, shall be excluded.
Explanation 2-It is clarified that the provisions of section 29B of the Industries (Development and Regulation) Act, 1951 shall be applicable to the enterprises specified in this sub-section.".
• For section 8 of the principal Act, the following section shall be substituted, namely:-
"8. (1) The Central Government shall notify a national digital platform for free and voluntary filing of memorandum for registration of micro, small and medium enterprises, to empower and enable them to avail the benefits from the Central Government under the provisions of this Act in such form and manner as may be prescribed by the Central Government.
(2) The State Government may notify a State digital platform for free and voluntary filing of memorandum for registration of micro, small and medium enterprises in the State, to avail the applicable benefits from the State Government in such form and manner as may be prescribed by the State Government.
Explanation. For the purposes of this section, it is hereby clarified that the State Government may also provide to micro, small and medium enterprises registered under sub-section (1), applicable benefits under their Schemes.".
• In section 14 of the principal Act, in sub-section (2), the words, brackets and figure "sub-section (1) of shall be omitted.
• After section 15 of the principal Act, the following section shall be inserted, namely:-
'15A. (1) Notwithstanding anything contained in this Act or any other law for the time being in force, every Central Public Sector Enterprise shall, in respect of procurement of goods or services from micro, small and medium enterprises, route the settlement of invoices through a Trade Receivables Discounting System platform, authorised by the Reserve Bank, in such form and manner as may be prescribed by the Central Government.
(2) The Central Government may, by notification, specify any other authority, body, or entity other than Central Public Sector Enterprise, in respect of procurement of goods or services from micro, small and medium enterprises, who shall thereafter route the settlement of invoices as provided for in sub-section (1), in such form and manner as may be prescribed by the Central Government.
(3) The State Government may, by notification, specify such State Public Sector Enterprise, any other authority, body, or entity, in respect of procurement of goods or services from micro, small and medium enterprises, who shall thereafter route the settlement of invoices as provided for in sub-section (7), in such form and manner as may be prescribed by the State Government.
Explanation For the purposes of this section, the expression "Trade Receivables Discounting System" means an electronic platform for facilitating the financing or discounting of trade receivables of micro, small and medium enterprises in accordance with the guidelines issued by the Reserve Bank from tome to time."
• In section 18 of the principal Act (as substituted by section 62 read with the Seventh Schedule of the Mediation Act, 2023),-
(a) in sub-section (3), after the words and figures "the Mediation Act, 2023", the words, figures, brackets and letter "except the time-limit for completion of mediation provided under section 18 of that Act, and for the purposes of this Act, such time-limit shall be as per sub-section (34)" shall be inserted:
(b) after sub-section (3), the following sub-section shall be inserted, namely:-
"(34) The Micro and Small Enterprises Facilitation Council or mediation service provider, as the case may be, shall complete the mediation within a period of ninety days from the date fixed for first appearance.":
(c) in sub-section (4), after the words "the Council shall", the words "within a period of thirty days from the date of termination of mediation" shall be inserted:
(d) after sub-section (4), the following sub-section shall be inserted, namely:-
"(4A) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or any institution or centre providing alternative dispute resolution services, as the case may be, shall make the award within a period of ninety days from the date of completion of pleadings.";
(e) for sub-section (5), the following sub-sections shall be substituted, namely:-
'(5) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or mediation service provider or any institution or centre providing alternative dispute resolution services shall have jurisdiction to act as a mediator or arbitrator under this section in a dispute between the supplier, whose official address as per the registration made under section 8, is located within its jurisdiction and a buyer located anywhere in India.
(6) The Central Government may, by notification, establish an online mechanism for conducting online mediation or arbitration through audio-video and other electronic means, under this section.
(7) The procedure and manner of online mechanism referred to in sub-section (6) shall be such as may be prescribed by the Central Government.
Explanation. For the purposes of this Act. the expression "audio-video and other electronic means shall include use of any communication device for video conferencing. filing of pleadings. communication, recording of evidence, transmission of electronic communication. for the purposes of conduct of arbitral proceedings and any other matters incidental thereto.
[BILL NO. LXXII OF 2026]
