43,904 claims involving Rs 700 crore by micro, small and medium enterprises (MSMEs) have been settled by the government under the Vivad se Vishwas I – Relief for MSMEs scheme, which was announced in this fiscal budget, Finance Secretary TV Somanathan said Thursday, according to a news report by The Indian Express.
The scheme allows for settling pending disputes related to government contracts during the Covid pandemic. In November, the government extended the last date for MSMEs to submit their claims on the Government eMarketplace (GeM) portal to December 31 from earlier October 31.
“There are approximately 4,000 claims remaining to be decided but a majority have been decided. This has given substantial relief to a number of MSMEs. Also, this makes them eligible for further credit, for further supply,” Somanathan said.
MSMEs which couldn’t execute the contracts during the Covid period are allowed a 95 per cent refund of the performance security, 95 per cent of the bid security, 95 per cent of the liquidated damages (LD), and 95 per cent of the risk purchase amount forfeited or deducted under the scheme.
In addition, companies debarred due to default in the execution of such contracts, the scheme allowed for revoking such debarment by issuing an appropriate order by the procuring entity. The MSME cannot file a claim if it has been ignored for placement of any contract due to debarment in the interim period (date of debarment and the date of revocation).
For filing the claim, the original delivery period of the contract or completion period stipulated in the contract has to be between February 19, 2020, and March 31, 2022.
Importantly, a finance ministry’s statement on September 26 had noted that the government has accepted more than 10,000 claims by MSMEs, leading to a grant of more than Rs 256 crore to MSMEs. The highest relief amount of Rs 116.47 crore was granted by the Ministry of Petroleum and Natural Gas (MoPNG) in 2,807 claims accepted, FE Aspire had reported.
In November, industry body PHD Chamber of Commerce and Industry had urged the government to extend the date for registering claims by MSME vendors under the scheme till the end of the current financial year under the scheme.