Among central ministries, the Ministry of Railways has the highest amount pending in delayed payments to micro and small enterprises (MSEs), according to the data available on the government’s delayed payment monitoring portal MSME Samadhaan. The amount due across 100 applications and cases by the Railways Ministry at the time of filing this report stood at Rs 83.55 crore.
Among the top railway public sector units (PSUs) with the maximum pending amount were Rail Vikas Nigam (Rs 23.87 crore across five applications and cases), Container Corporation of India (Rs 20.55 crore across nine applications and cases), IRCON International (Rs 13.23 crore across 10 applications and cases), Railtel Corporation India (Rs 10.69 crore across seven applications and cases).
According to the data, the Ministry of Space had the second maximum pending amount of Rs 75.40 crore across 16 applications and cases followed by the Ministry of Information and Broadcasting with Rs 17.39 crore pending across 21 applications and cases, Ministry of Electronics and Information Technology with Rs 16.97 crore across 19 applications and cases, Ministry of Road Transport and Highways with Rs 16.48 crore across 18 applications and cases.
The total amount pending across central ministries was Rs 284.60 crore across 437 applications and cases combined.
The applications filed by MSEs against delay in payment from their buyers are converted into cases by MSE Facilitation Councils (MSEFC) under various stages of hearing. MSEFC of the respective state/region after examining the case issues directions to the buyer for payment of the due amount along with interest as per the provisions under the MSME Development Act 2006.
Delaying payment beyond 45 days makes the buyer liable to pay compound interest with the monthly rests to the supplier on the amount at three times of the bank rate.
Moreover, as per the revised Section 43B of the Income Tax Act, expenses to buyers on invoices from micro and small enterprises will be allowed if paid within 45 days in the year of actual payment instead of the year when it was incurred as an expense.
Last week, Reserve Bank of India’s (RBI) deputy governor Swaminathan J at an event asked banks for supportive measures to MSEs facing delayed payments issue. The deputy governor had said that financial institutions should focus on deploying supportive measures such as restructuring options, grace periods, and tailored repayment plans to help MSEs deal with issue.