Govt to restructure MSE facilitation councils to resolve delayed payments

livemint.com:

The entire end-to-resolution process now is not online, but the application process is. Anil Bhardwaj, Secretary General of the Federation of Indian Micro and Small & Medium Enterprises (FISME) said: "Arbitral awards given by the MSME facilitation councils are often appealed in higher courts, and the issue of delayed payments to MSMEs takes that much longer to be resolved." He further said that the the execution of arbitral award given towards MSMEs currently takes considerable time period which impacts the finances of these small businesses.

"The execution of award does not happen in a swift manner. It takes very long for MSMEs to actually receive the benefits of the arbitral award in their favour," he said.

Krunal Modi, founding member and manager, Presolv360, an online dispute resolution platform which handles arbitration and mediation noted that a crucial issue with MSEFCs is the lack of expertise. "If they delegate disputes to specialised dispute resolution institutions, the issue of delayed payments may be resolved more efficiently.

MSEFCs have the power to delegate issues this way under the MSMED Act, but a lack of guidelines from state governments prohibits them from doing so," he added. Speaking at a recent event on World MSME Day, Rajneesh, additional secretary at the MSME ministry said: “We want to bring about the first amendment to the MSME Act that was passed in 2006 in order to make the provisions of the Act more conducive to the requirements of MSMEs." He further said that the ministry is collaborating with stakeholders such as the ministry of law and justice and experts at National Law Universities (NLUs) to frame the amendments.