Govt may extend legal cover to medium enterprises to help with payment delays from clients
Subscribe to enjoy similar stories. The government is likely to consider including medium enterprises for the protection granted under the MSME Development (MSMED) Act, 2006, to resolve payment disputes. MSME stands for micro, small, and medium enterprises.
The government is considering amendments to definitions in the MSMED Act, two people aware of the matter said, at a time when industry stakeholders have demanded the inclusion of medium enterprises in the definition of "supplier" in the law. Consultations regarding amendments to certain definitions in the MSMED Act are ongoing, one of the officials mentioned above told Mint, requesting anonymity. Only micro and small businesses are currently covered by the protection.
Medium enterprises are defined under the law, but not included in the definition of "supplier". The MSMED Act defines all three enterprises - micro, small, and medium. The definition of "supplier", however, includes only micro and small businesses.
An email query seeking confirmation of this development to the ministry of micro, small, and medium enterprises sent on Thursday evening remained unanswered till press time. Micro enterprises are those that have an investment of under ₹1 crore and a revenue of under ₹5 crore; small enterprises are those with an investment of under ₹10 crore and revenue of under ₹50 crore; and medium enterprises have and investment of under ₹50 crore and revenue of less than ₹250 crore, as per definitions revised by the union government in June 2020. "A majority of Indian MSMEs are a part of the services sector, and currently discussions are underway to also promote those in the manufacturing sector.
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