From the Chairman’s Desk – November, 2026

Dear Members and Esteemed Readers,

It gives me great pleasure to present this special issue of our journal, devoted to a theme that sits at the very heart of India’s economic story: Micro, Small and Medium Enterprises (MSMEs).

For most of us in practice, the MSME is not a statistic. It is the client who walks in with a shoebox of vouchers, the manufacturer who funds growth from his own receivables, the family business preparing for its first listing. As Chartered Accountants, we are among the few professionals who see this sector at every stage of its life, from registration and bookkeeping to audit, tax, funding and, increasingly, the capital markets.

As India progresses towards its vision of Viksit Bharat, the MSME sector stands as the primary engine driving industrial output, regional development, employment, and exports. According to the Economic Survey 2025–26, MSMEs contribute 31.1% to India’s GDP, account for 35.4% of manufacturing output, and generate 48.58% of overall exports. As per PIB factsheet around 9.16 crore enterprises as on August 2026 are MSMEs registered on Udyam (Udyam Portal + Udyam Assist). Rs. 3.47 lakh crore worth of invoices discounted on TReDS platform in 2025-26. As per NSE Market plus report 111 listings raising Rs.5,363 crore in FY 2025-26 from SME listing of companies. Supporting livelihoods for over 32 crore individuals across urban, semi-urban, and rural landscapes, this sector exemplifies grassroots entrepreneurship.

Three observations stand out.

• Formalisation is no longer an aspiration but a fact: registrations have grown roughly twelve-fold since FY 2021-22.
• Credit and receivables financing are deepening, with bank lending to the sector growing faster than the banking system as a whole and TReDS volumes multiplying within three years.
• The capital markets are opening up to the sector, although the cyclical swings in SME IPO activity remind us that enthusiasm must be matched by diligence.

Yet, the paradigm for Indian MSMEs is undergoing a structural shift. The days of operating as informal, family-run entities relying solely on unwritten knowledge and short-term bank credit are rapidly declining. Today, MSMEs navigate a tightening tax regime, stringent ESG mandates from global supply chains, increasing operational complexity, and unprecedented opportunities in equity capital markets.

A Policy Environment in Transition

Two recent developments deserve the particular attention of our members.

1. The MSME Development (Amendment) Bill, 2026, passed by Parliament in August 2026, amends the 2006 Act in several respects relevant to our practice:
   • Classification to be based on investment in plant and machinery or equipment and turnover.
   • Free and voluntary registration for all MSMEs, with a national digital platform.
   • Mandatory settlement of MSME invoices by Central Public Sector Enterprises through TReDS, with States empowered to extend this to their own entities.
   • Time-bound dispute resolution: mediation within 90 days, reference to arbitration within 30 days, and an award within 90 days.
   • Courts to direct payment of at least 50% of the awarded amount to micro and small suppliers where a challenge remains pending beyond six months.
   • Decriminalisation of certain registration and information offences, and a graded warning-penalty-fine approach to non-disclosure of unpaid dues.
     
2. The Union Budget 2026-27 set out a three-pronged approach of equity, liquidity and compliance support, including a ₹10,000 crore SME Growth Fund, a ₹2,000 crore top-up to the Self-Reliant India Fund, credit guarantee support for invoice discounting on TReDS, and the creation of a cadre of ‘Corporate Mitras’ in Tier-II and Tier-III towns, trained through courses designed by ICAI, ICSI and ICMAI to help MSMEs meet compliance requirements at affordable cost. In addition, the RBI has doubled the limit for collateral-free loans to MSMEs from ₹10 lakh to ₹20 lakh with effect from 1 April 2026.

The common thread is clear: payment discipline, formal records and access to organised capital are becoming the price of admission to the MSME growth story.

In this issue the articles that follow approach the theme from five complementary angles. Taxation for MSMEs which examines payment linked deduction for dues to micro and small suppliers and the presumptive route for small businesses. A practical guide to protect ones MSME enterprise from all the risks. A futuristic article on ESG incentives for the Indian MSMEs. Various operations and controls which can be used by MSME leveraging technology. Lastly, professional opportunities for Chartered Accountants in MSME funding, transaction advisory and listing on bourses

Taken together, these articles trace a single arc: sound processes lead to reliable records, reliable records enable compliance and protection, and compliance and protection earn access to credit, markets and capital.

I extend my sincere gratitude to all our authors for sharing their time and expertise, and to the editorial team for bringing this issue together. I also thank you, our readers, for your continued engagement.

MSMEs have always been the quiet engine of India’s growth. As Chartered Accountants, let us be the trusted partners who help that engine run with discipline, transparency and ambition.

With warm regards,

CA Harsh H. Dedhia

[The author can be reached at harsh_dedhia86@yahoo.com.]