As the competition in the market is rapidly growing, the contribution of Micro, Small and Medium Enterprises (MSME) sector in employment sector is striking in the Indian’s economy. But due to rapid increase in this sector, they usually face financial distress due to fluctuation in the market, late payments, increasing operating expenses and issues with credit availability. Therefore, to rescue these distressed MSMEs, Insolvency and Bankruptcy Code, 2016 plays a major role. The Chapter IV referred to as the Fast Track Corporate Insolvency Resolution Process (Fast Track CIRP) in Insolvency and Bankruptcy Code, 2016 provides provisions for corporate insolvency of such companies. But these provisions were poorly implemented in practice. Accordingly, following the legislative changes initiated through the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 and enacted as the Insolvency and Bankruptcy Code (Amendment) Act, 2026, Chapter IV of Part II of the Insolvency and Bankruptcy Code, 2016, which contained the Fast Track CIRP framework, was omitted. The research paper analyzes the reasons for removal of the Fast-Track insolvency provisions and its impact on MSMEs. The paper also constitutes a comparative analysis of the legal framework for insolvency of small business in United Kingdom, United States and Singapore. The research concludes that there is no denying that the exclusion of Chapter IV in the Insolvency and Bankruptcy Code (Amendment) Act, 2026 does a significant favour to the statutory scheme by building a parallel process, which has become largely redundant, but the article has shown that the challenges that remain faced by MSMEs are unique, stemming from their limited financial resources, heightened sensitivity to procedural delays and disproportionate cost associated with the ordinary Corporate Insolvency Resolution Process (CIRP) proceedings.