Bill to tackle payment delays faced by MSMEs passes Rajya Sabha, amid Opposition protests

The Rajya Sabha on Monday, August 3, passed a bill that seeks to tackle the issue of delayed payments to MSMEs. The new bill now enables prescribed timelines to ensure faster adjudication of disputes, provide recovery of the settlement agreement, and address their liquidity issues. The bill passed even as Opposition members continued to disrupt the House.

The Upper House was adjourned for the day soon after the passage of the Micro Small and Medium Enterprises Development (Amendment) Bill, 2026, that seeks to empower courts to order payment of at least 50 % of the awarded amount to MSME suppliers, if the application to set aside an order is pending for more than six months.

Members of the Opposition kept raising slogans throughout the discussion of the bill and later during its passage by voice vote. They were demanding the presence of Home Minister Amit Shah to answer questions on police action against students protesting the NEET exam paper leak and kept shouting slogans like "we want justice".

Replying to the discussion on the bill, Union Minister for MSME Jitan Ram Manjhi outlined the advantages of the proposed legislation for the sector and various sections of society, and expressed dismay at the loud protests by Opposition members.

"We expected our opposition allies to support, cooperate, and pass this bill, but today they are opposing ... I am surprised, but despite this, I propose before the House that this bill be passed by amending the 2006 Act," said the minister.

The bill seeks to address the current challenges faced by the MSME sector by improving the administrative structure and facilitating payment mechanisms, he said.

"Its objective is to balance the interests of all concerned parties while maintaining constitutional principles and the interests of businesses," Manjhi said, reassuring the House that the government is committed to the development of the MSME sector.

He described the MSME sector as the backbone of the economy, which contributes significantly to the country's manufacturing and exports.

He outlined that MSMEs contribute 31 % to India's GDP, 36 % to the country's manufacturing and 41 % to its exports.

"The outstanding credit disbursed to MSMEs, which stood at Rs 10 lakh crore in 2014-15, has today increased to over Rs 38.35 lakh crore, denoting that the credit flow to MSMEs is rising steadily," the minister told the house.

The MSME Ministry is committed to making 'Champion MSMEs', Manjhi said.

After the passage of the bill, Leader of the House J P Nadda claimed the Opposition members have not even supported the amendments moved by their party.

The Rajya Sabha witnessed sustained sloganeering and protests from the Opposition over the recent students' agitation at Jantar Mantar, even as members debated the bill aimed at strengthening the MSME sector.

Trouble began even before the discussion started, when Leader of Opposition Mallikarjuna Kharge was not permitted to speak, prompting the entire Opposition to press the Chair to allow him. Kharge asked whether the sky would fall if he was allowed to speak for five minutes.

Leader of the House J P Nadda said the MSME minister had already moved the bill and the discussion had begun on the bill.

Congress MP Ajay Maken protested, saying it was "unfortunate" that the LoP was being denied a chance to speak.

"It has never happened that when LoP wants to speak, he is denied... Indian citizens are watching," he said.

Nadda objected to this, saying Maken had not spoken a single sentence on the bill and urged the chair that his remarks be expunged.

Turning to the bill, he alleged discrimination between big corporates and MSMEs. "Haircut is allowed for big corporates, but not for MSMEs," he said, before again attempting to raise the protest issue.

This led to strong protest by Parliamentary Affairs Minister Kiren Rijiju, who alleged that Maken was "trying to lower the dignity of the House" despite being given several opportunities to speak.

The disruption continued through the debate, with Opposition members repeatedly attempting to raise the issue of police action against students protesting at Jantar Mantar whenever called to speak on the bill, forcing Deputy Chairman Harivansh to intervene and ask them to confine themselves to the subject -- an appeal that went largely unheeded.

Sumitra Balmik (BJP) said the poor were suppressed under Congress rule and that the Modi government was bringing them into the mainstream, reciting a couplet aimed at sloganeering members: "Aandhiyan bujhati chirag, Modi ne toofan mein chirag jalaye hain."

Dola Sen (TMC) began speaking on how the MSME sector could address unemployment but veered to demand that the Home Minister respond on the law-and-order situation, saying "no one is safe." She was cut short by the Chair.

Santrupt Misra (BJD) was asked to speak next, who sought better cash flow support, central agency assistance during formalisation, and coordinated GST and trade-discounting platforms for MSMEs.

Supporting the bill, Masthan Rao Yadav Beedha (TDP) and Naveen Chandra Vaddiraju (BRS) said it would further empower the sector.

Golla Baburao (YSRCP) sought a PLI scheme for MSMEs, while M Thambidurai (AIADMK) urged financial and infrastructure support for states.

Rajendra Hiralal Jain (NCP) said the Opposition would support the bill "if they listen to it carefully."

Sanjay Seth (BJP) accused Congress of neglecting the MSME sector and "misleading" youth.

Pramod Boro (UPPL) supported the bill and sought credit-linked relief during natural calamities, while Ramji Lal Suman (BSP) suggested restricting factories on fertile land and permitting MSMEs to produce ethanol for petrol blending.

Santosh Kumar P (CPI), Neeraj Dangi (Congress), Praveen Chakravarthy (Congress) and V Sivadasan (CPM) also attempted to raise the students' issue, while Chowdhary Mohammad Ramzan (JKNC) remarked that "the House is not in order."

Sulata Deo (BJD) flagged concerns over MSMEs in Odisha, saying seed money was not reaching beneficiaries.

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.

It provides for notifying a national digital platform for free and voluntary registration of micro, small and medium enterprises.