Govt claims MSME dues cleared, industry disagrees

‘Total govt dues to MSMEs stood at Rs 5.5 lakh crore at FY20-end, in 40:60 ratio between Centre (including PSUs) and states’

 The extension of workhours is from the current eight hours a day and 48 hours a week. 

The Centre is guaranteeing collateral-free loans of Rs 3 lakh crore to micro, small and medium enterprises (MSMEs), but MSME minister Nitin Gadkari has created a flutter by saying that the Central government, state governments and corporate India together owe more than Rs 5 lakh crore to MSMEs.

Information gathered by FE showed that the Central government, Central PSUs and some state PSUs together owed about Rs 5 lakh crore in dues to MSMEs and state-run agencies like FCI as on March 31, 2019. Since then, the Centre’s dues to FCI have increased from Rs 1.3 lakh crore to Rs 2.55 lakh crore. While NHAI had outstanding dues of Rs 50,000 crore in March 2019, it is now caught in litigation with contractors and investors, who are claiming Rs 78,653 crore in dues.

State power distribution companies (discoms), which owed dues of Rs 60,000 crore to power producers in March 2019, owe them Rs 94,000 crore as on March 31, 2020. On their part, state transport corporations owed several thousands of crores to their suppliers like oil marketing companies.

According to a Niti Aayog assessment, the Central government departments themselves had dues of Rs 1.5 lakh crore to the industry at end-March 2019. These departments also owe a lot of money to service providers.

However, expenditure secretary TV Somanathan on Friday said the dues from 26 top Central PSUs to MSMEs was only Rs 773 crore as on March 31, 2020 as they have been clearing dues since the government launched a special drive in September 2019. Including defence establishments, railways and other departmental undertakings, the dues from the Centre and departmental undertakings were less than Rs 10,000 crore till recently, he said. “We have verified the vast majority of these dues are not overdue as they are within 45 days of working capital cycle prescribed in the MSME Act,” Somanathan added.

Former national president of All India Manufacturers Organisation KE Raghunathan said the government might be referring to the cases reported by MSME Samadhaan website, an online delayed payment monitoring system. According to the website, applications worth Rs 10,903 crore were filed against Central government and its undertakings, among others. Raghunathan said most of the MSMEs have not taken this route for fear of repercussions to their business.

The total dues to MSME were approximately Rs 5.5 lakh crore as on March 31, 2020 – distributed in the ratio of 40:60 between the Central government (including PSUs) and states (including state PSUs), Raghunathan said.

“In the 40% Central dues, I feel 5% on tax refunds, about 10% Central ministry dues and 25% from Central PSUs. In states’ 60%, dues from state departments will be 45% and their undertakings 15%,” Raghunathan said.

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