Hans News Service Amaravati

Ina move aimed at improving state’s business climate and ensuring quicker resolution of payment disputes involving micro and small enterprises, the state government has reconstituted the Andhra Pradesh State Micro and Small Enterprises Facilitation Council (APMSEFC) and four Regional Facilitation Councils for another two-year term, aligning the dispute resolution mechanism with the Centre’s digital Online Dispute Resolution (ODR) framework.

The reconstituted councils will function from June 2, 2026, to June 1, 2028, handling conciliation and arbitration cases under the MSME Development Act, 2006, providing a faster legal avenue for MSMEs struggling to recover payments from buyers.

The biggest operational change is the complete shift to the MSME Online Dispute Resolution (ODR) portal, as mandated by the Union ministry of MSME.

All new payment dispute cases will now be filed, heard and processed digitally through the national platform, replacing the conventional manual process.

To support the online mechanism, the government has authorised four specialised Alternative Dispute Resolution (ADR) institutions empanelled by the Centre to conduct digital conciliation and arbitration. These include institutions in Hyderabad, Bengaluru, Chandigarh and Visakhapatnam, allowing disputes to be resolved electronically with recognised arbitration agencies.

Under the revised structure, the State Facilitation Council at Mangalagiri, headed by the commissioner of industries, will hear disputes involving principal claim amounts exceeding Rs 50 lakh, besides cases referred by regional councils. It has also been empowered to directly conduct arbitration or appoint any of the empanelled ADR institutions to resolve disputes under Section 18 of the MSMED Act.

To decentralise the process, four Regional Facilitation Councils will continue functioning at Visakhapatnam, Guntur, Tirupati and Kurnool. These councils will handle disputes involving claims of up to Rs 50 lakh, reducing the burden on the state level council and enabling quicker disposal of cases closer to businesses.

Each council will comprise representatives from the Industries department, Federation of Andhra Pradesh Small Industries Association (FAPSIA), Andhra Pradesh State Finance Corporation (APSFC), Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and the industries department, ensuring both government and industry participation in dispute resolution.

The government believes the strengthened digital dispute resolution mechanism will improve payment discipline, reduce litigation delays and enhance confidence among MSMEs while reinforcing State’s efforts to build a more investor-friendly and business-efficient ecosystem.