Centre to launch online MSME dispute resolution portal on 27 June
NEW DELHI
:
The government is set to launch an online dispute resolution (ODR platform for small businesses to improve their ease of doing business on 27 June, according to two officials directly aware of the development.
'The MSME ODR portal has been tested, and dispute resolution using the portal has also begun during the testing phase," said one of the officials on the condition of anonymity.
The portal, a part of the government's World Bank-supported Raising and Accelerating MSME Performance (RAMP) scheme, is aimed at resolving delayed payment disputes by facilitating communication between debtors and micro and small enterprises (MSEs), said the second official.
Also Read: Bank loan sanctions to MSMEs for job creation down nearly a third in FY25
Mint first reported on 12 March that the government was going to digitize to dispute resolution for small businesses.
So far, micro and small enterprises facilitation councils (MSEFCs) have resolved disputes, especially those related to delayed payments. As of the date, 161 councils have disposed of over 52,000 cases involving transactions worth ₹9,241 crore, out of nearly 100,000 such complaints by MSEs.
Data on the micro, small, and medium enterprises (MSME) ministry's delayed payment monitoring system, Samadhaan portal, showed that more than 20 MSEFCs had not resolved a single case since their launch in 2017.
The data also showed a wide variance in MSEFCs' actions. While 27 MSEFCs saw not even a single case, a few councils, such as MSEFC Mumbai, MSEFC Pune, and MSEFC Gandhinagar, resolved a considerable number of cases.
MSEFC Mumbai resolved 4,625 matters involving about ₹750 crore out of the 7,756 cases it received. MSEFC Pune saw 6,956 complaints and resolved 5,271 of them, involving ₹223 crore. MSEFC Gandhinagar received 6,297 grievances and resolved 5,777 cases involving ₹809 crore, showed the data.
'As of the date, approximately 42% of the applications filed by MSEs are either yet to be viewed by MSEFCs or are at the consideration stage," said Krunal Modi, founding member and chief of staff, ODR platform Presolv360. 'One of the local MSEs recently shared with us that their first meeting was called by the concerned council after four months of filing the case. Additionally, our interactions with various MSEFCs have revealed that there is not only a manpower constraint but also a lack of physical infrastructure," he added.
Also Read: MSMEs call for relaxations in the new FEMA regulations for exports and imports
Under the procedure laid down in the MSME Development Act, 2006, micro and small businesses can approach these councils to seek payments from buyers that have been delayed longer than 45 days.
Private mediators
Interestingly, the new portal will allow private ODR service providers to be empanelled, putting into motion a key provision in the Act allowing MSEFCs to delegate cases to private institutions.
As per the powers given to an MSEFC under Section 18 of the Act, an MSEFC can either conduct arbitration and conciliation proceedings in cases filed or provide assistance to any institution that provides alternative dispute resolution services.
Alternative dispute resolution refers to any dispute resolution that takes place beyond courts. It includes procedures such as arbitration, mediation, and conciliation, where parties can resolve their issues speedily.
Independent or private institutions providing ODR services shall only provide services through the new portal, as stated in the 2 April guidelines for appointment of such firms.
The guidelines said these institutions should maintain a panel of arbitrators, mediators, and conciliators to resolve disputes on the portal.
MSEFCs are created and operated by state or Union territory governments, as per the MSME Development Act. These states will have to enter into agreements with private ODR service providers after seeking information related to their operations. State governments will gather information related to the private ODR firms' incorporation, as well as about fees charged, the number of disputes resolved through arbitration, mediation, or conciliation, the guidelines said.
More needs to be done
However, the model followed by MSEFCs may not follow a key principle of arbitration—party autonomy, according to experts.
'The ADR procedure laid down in the Act has an element of conflict of interest, where the MSEFC can itself refer the matter for arbitration without mutual consent of the parties. Also, there is no bar for the conciliator or mediator sitting as an arbitrator," said P. Madhava Rao, registrar at Hyderabad's Amika Arbitration and Mediation Council, which provides ODR services.
Also Read: MSME makeover: New definitions unlock bigger benefits, faster resolutions
'The main obstacle in the MSEFC ecosystem is the delay in resolving grievances and the presence of conflicts of interest," Rao added.
States will also have to ensure that the dispute resolution personnel from private ODR firms abide by the MSME Development Act and the Arbitration & Conciliation Act, 1996.
The Arbitration & Conciliation Act is currently undergoing reform, with the Union ministry of law and justice pushing for more institutional arbitration, Mint reported on 18 October 2024.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
38 minutes ago
- Hindustan Times
Gurugram: Dwarka e-way RWAs hold protest against enroachments
Representatives of around 10 resident welfare associations (RWAs) from condominiums along the Dwarka Expressway and their residents held a protest on Sunday against encroachments and illegal constructions along the expressway and master roads. A meeting was also conducted, where issues pertaining to sanitation, roads, and lack of transport were discussed. Gurugram: Dwarka e-way RWAs hold protest against enroachments The RWA representatives and residents gathered in front of Enigma apartments in Sector 110 along with condominium residents and protested against the construction of a structure on the land earmarked for green belt of the Dwarka expressway. 'The entire stretch of land along Dwarka expressway which has been earmarked for green belts is witnessing illegal construction of shops and other buildings. We want action from the authorities,' said Vibhas Kumar, president, Enigma Apartments RWA. Earlier, the RWA representatives held a meeting under the aegis of Dwarka expressway Gurugram Development Association to discuss pressing civic issues affecting the large number of residents in societies along Dwarka expressway. Sunil Sareen, joint convenor of the association said the meeting centered around urgent civic and infrastructure issues such as pending development of the 24-metre service roads, lack of unified electricity billing system, incomplete 33kVA electricity infrastructure, lack of public transport, rampant encroachment of green belts and lack of development work by civic agencies. During the meeting, it was also decided to form three committees to pursue the matter with authorities and the court to ensure that civic conditions improve, said the representatives. 'It has been decided to form three committees which will pursue issues related to roads, green belts, and infrastructure. All the RWAs will join hands and pursue development issues and address lacunae in working of HRRS (Haryana Registration and Regulation of Societies) Act,' Sareen said. RS Bhath district nodal officer, enforcement, when asked about illegal construction on land marked for green belts said that action will be taken if construction is being carried out on land acquired by the government. 'In case the land has not been acquired then matter will taken up with concerned local authority and action initiated. Illegal constructions and encroachments will not be allowed,' he said.
Time of India
2 hours ago
- Time of India
Low minimum wage fuels migration, school dropouts, quiet despair in Raj
1 2 3 Jaipur: After a backbreaking eight-hour slog under the unrelenting sun at a construction site, 43-year-old Shyam Lal goes home with Rs 285, his day's wage set by the Rajasthan govt for unskilled workers. With the wage, which is much lower compared to many other states, he just manages to escape the extreme poverty line of $3 a day set by the World Bank. But Shyam Lal remains enmeshed in the vicious cycle of poverty, as he struggles to fulfil educational, social and family obligations, while hoping no medical emergencies would ruin his life. "We work all day, yet return home with empty pockets," he says, reflecting the grim reality of thousands of labourers across Rajasthan. In Jan 2025, the state govt marginally increased daily wages by Rs 26 for unskilled labour, from Rs 259 to 285. But this revision, coming after several years, has done little to ease their financial distress. With monthly earnings of Rs 7,410 (based on 26 working days), even the most basic expenses are well beyond reach. Despite repeated appeals, the state still uses an outdated formula for wage revision, increasing Rs 1 for every one-point rise in Consumer Price Index (CPI). This method is widely criticised for not factoring in the impact of inflation with prices of essentials like milk and vegetables doubling in the past five years. Meanwhile, other Indian states have moved towards more progressive and inflation-sensitive models. Delhi, which revises wages quarterly, offers Rs 710 for unskilled workers and Rs 937 for highly skilled. It uses a Variable Dearness Allowance (VDA) linked directly to CPI. Maharashtra adopts industry-specific wages with biannual inflation-linked updates, offering Rs 598 to Rs 764. Similarly, Karnataka and Tamil Nadu incorporate regional costs and living standards into their models. The consequences are dire. Workers in Rajasthan are migrating in large numbers to neighbouring states, leaving local industries short-staffed. Skilled artisans are leaving ancestral trades, and families are forced to pull children from schools to support household income. Economists warn that stagnant wages amid rising inflation reduce the purchasing power of workers and increase poverty even when employment remains stable. Mukesh Goswami, secretary of Rajasthan Asangathit Mazdoor Union in Jaipur, says the vicious cycle has resulted in hunger, school dropouts, and quiet despair. "After nearly 20 months, the state govt revised the wages in July 2022 by increasing only Rs 7. The increase that came in Jan 2025 was marginally better at Rs 26. In the meantime, prices of food, house rent, fuel, and education shot up to unaffordable levels. It was not a relief but an insult," said Gosawmi. Recently, the union has written a letter to CM Bhajan Lal Sharma appealing for an urgent and comprehensive revision of labour wages across all skill levels, the introduction of an inflation-responsive wage mechanism, and a structured approach to time-bound revisions. "This is not just a request, it is a sincere call for attention. What we are seeking now is not charity, but fair and dignified recognition of their contribution," said Goswami.
Indian Express
2 hours ago
- Indian Express
Train reservation chart set to be prepared 8 hours before departure
The Railway Board has proposed preparing the seat reservation chart eight hours before a train's departure. The chart is currently prepared four hours before departure. Officials said that for trains departing before 2 pm, the chart will be prepared the previous day at 9 pm itself. A senior official of the Ministry of Railways said that under the current system, passengers arriving at stations from distant areas would have little clarity on their waitlisted ticket's status while leaving their home. 'Now, passengers will get the update on waitlist status well in advance. There were many complaints regarding the chart preparation time. The passengers coming from remote areas or suburbs of major cities to the Railway Station for taking long distance trains had to go back many times because of non-confirmation of the waitlisted ticket. Now, such passengers will get time to make alternative arrangements,' said the official quoted above. The official said that Railways Minister Ashwini Vaishnaw has directed the board to start implementing this move in phases to avoid disruption. Vaishnaw also reviewed the upgradation of the passenger reservation system, which is expected to enhance the ticket booking capacity by over 1.5 lakh ticket bookings per minute. This will be an increase of around five times from 32,000 tickets per minute in the current system. 'The ticket enquiry capacity will increase ten times from 4 lakh to over 40 lakh enquiry per minute time. Further, OTP-based authentication will be done for Tatkal bookings from the end of July, 2025. The authentication should be done using Aadhaar or any other verifiable Government ID available in the user's DigiLocker account,' said the official. Dheeraj Mishra is a Principal correspondent with The Indian Express, Business Bureau. He covers India's two key ministries- Ministry of Railways and Ministry of Road Transport & Highways. He frequently uses the Right to Information (RTI) Act for his stories, which have resulted in many impactful reports. ... Read More
