Credit and finance for MSMEs: Applications filed by micro and small enterprises (MSEs) against government enterprises, departments and central public sector enterprises for delay in payments have jumped by a whopping 79.8 per cent during the first quarter of the financial year 2023-24 from the year-ago period. 13,791 delayed payment applications were filed by MSEs during the quarter ended June 30 in comparison to 7,768 applications filed during Q1 FY23, official data showed. In contrast, the growth in delayed payments applications during Q1 last fiscal stood at 11.2 per cent only with 6,983 applications filed during Q1 FY22.
However, the amount involved in applications filed during Q1 FY24 saw a marginal drop of 4.8 per cent to Rs 1,705.16 crore from Rs 1,792.18 crore in applications filed during Q1 FY23, data from MSME Samadhaan portal via MSME Dashboard showed. The amount involved in applications filed during Q1 FY22 was Rs 1,653 crore.
Also read: MSME delayed payments: Amount disposed so far crosses Rs 5,000 crore
Even as the number of applications filed recorded a massive jump, the number of applications disposed by MSE facilitation councils saw a huge drop of 95 per cent. Only 39 applications involving Rs 1.46 crore were disposed by councils in Q1 of this fiscal in comparison to 778 applications involving Rs 71.50 crore disposed during the corresponding period in the previous fiscal. The drop was wider at 97 per cent in comparison to 1,371 applications amounting to Rs 120.56 crore disposed in Q1 FY22, data revealed.
However, applications which were mutually settled with buyers increased by 7 per cent from 593 involving Rs 66.64 crore in Q1 FY23 to 635 applications involving Rs 37.47 crore in the current fiscal’s Q1.
Importantly, to address the delayed payment crisis, the budget 2023-24 had proposed to allow expense deduction in the income tax by the buyers only when payments are made.
Also read: MSME dues: 73% decline seen in YoY disposal of delayed payment applications in FY23
Overall, the delayed payment applications by MSEs disposed in FY23 had also dropped by a significant 73.5 per cent in comparison to a 50 per cent decline in FY22. According to the data, the councils disposed 1,043 applications involving Rs 182 crore in FY23 vis-a-vis 3,937 applications involving Rs 441 crore disposed in FY22 and 7,879 applications involving Rs 1,599 crore disposed in FY21.