MSMED Act Safeguarding MSMEs Against Payment Delays in India

The Micro, Small, and Medium Enterprises (MSME) sector is a cornerstone of the Indian economy, contributing significantly to GDP and employment. The MSMED Act, 2006 addresses long-standing challenges faced by MSMEs, particularly delayed payments. Key provisions include mandatory payment timelines of 45 days (Section 15), deemed acceptance of transactions within 15 days (Section 2(b)), and compound interest on delayed payments (Section 16).
The Micro and Small Enterprise Facilitation Council (MSEFC) ensures speedy dispute resolution within 90 days through Alternative Dispute Resolution mechanisms. Recent initiatives like the Samadhaan Scheme provide an online platform for filing payment complaints, while government schemes under Atma Nirbhar Bharat enhance liquidity. Judicial decisions, such as Maa Alloys Pvt. Ltd. and Gupta Power Infrastructure Ltd., have upheld MSME rights, setting strong precedents.
With proposed legal reforms and increasing awareness, the MSMED Act is driving positive change, safeguarding MSMEs, and securing their vital role in India's economic growth.
TO know more:https://www.amlawfirm.in/post/msme-act-2006-legal-framework-and-key-judicial-developments