Source: Mint
Context:
The Ministry of Micro, Small and Medium Enterprises (MSME) is exploring a proposal to empower the central government to empanel private online dispute resolution (ODR) firms to handle delayed payments cases, a move aimed at faster recovery of dues for MSMEs.
Proposed Changes:
| Aspect | Current Scenario | Proposed Changes |
|---|---|---|
| MSME ODR Portal | Launched in June 2025; allows MSMEs to file digital claims and monitor disputes with large firms, PSUs, and government agencies. | N/A |
| Authority for Empanelment | Currently, only state governments can empanel private ODR firms via MSEFCs under the MSME Development Act, 2006. | Central government to be empowered to empanel private ODR service providers, similar to states. |
| Effectiveness | State-level MSEFCs are largely ineffective: – 250,000+ claims pending – Less than 10% resolved mutually | Strengthen dispute resolution, especially in regions with limited private ADR institutions (e.g., north-eastern states, tier-II/III cities). |
| Implementation Status | Active portal, but resolution backlog exists | Proposal in progress; implementation may take time |
