New Delhi, June 29 -- Last week was a 'red-letter week' for micro, small and medium enterprises (MSMEs) in India. The government set out plans to amend the existing legal framework for MSMEs to tackle some of the biggest bugbears facing the sector: delayed payments and disputes over them, minor penalties and compliance burdens. The amendments, likely to be introduced in the monsoon session of Parliament due to start on 21 July, are long overdue.

The existing law on disputes arising from delayed claim payments is both cumbersome and time-consuming. MSMEs must first file a complaint with micro and small enterprise facilitation councils based in state capitals. These councils must then verify the complaint and refer the dispute for out-of-c...