NEW DELHI: The Centre is planning to use new tools to enhance liquidity for micro, small and medium enterprises (MSMEs) and will move amendments to the MSME Development Act in the monsoon session of Parliament that begins on Monday.Govt officials said cabinet on Wednesday cleared several amendments to the law as it seeks to remove hurdles coming in the way of MSMEs, a crucial cog in the wheel, which are not just major employers but also have a significant share in exports and a critical link in the value chain.The Cabinet has also approved amendments to provide statutory backing to the Udyam registration portal, and decriminalise several provisions of the law, while ensuring that major violations do not go unpunished. In fact, decriminalisation, a priority item for the Modi govt, is seen to be especially crucial for small companies for whom simpler rules and easier compliance help focus more on business.The proposed changes are intended to improve cash flow and access to finance by introducing enabling legal provisions that support quicker resolution of payment-related issues. Both the issues have been a constant complaint of the sector, given that the sector works on low margins and depends on buyers to run their business profitably. Any delay in payments affects their operations.The bill also seeks to introduce an online dispute resolution mechanism to improve ease of doing business, an official told TOI. The mechanism is expected to provide a faster and more cost-effective alternative to conventional legal processes, particularly for micro and small enterprises that often face delays in recovering dues.
