MSME Bill 2026 Overhauls Payment Recovery Framework

The Government has proposed a major overhaul of the MSMED Act to strengthen India's MSME ecosystem. 

The Bill mandates TReDS-based invoice settlement for public sector procurement, introduces time bound digital dispute resolution, strengthens recovery of MSME dues under the IBC, and replaces criminal prosecution with a graded penalty regime. 

The reforms aim to improve liquidity, reduce payment delays and make doing business easier for MSMEs.