Credit and finance for MSMEs: The number of delayed payment applications filed by micro and small enterprises (MSEs) against ministries, central and state government departments, public sector units (PSUs), and others in the first half of the current financial year (April-September) has declined from the corresponding period in the previous fiscal, indicating effects of Covid on payments waning slightly from last year.
According to the government data from the MSME Dashboard portal, 15,203 applications involving Rs 3,844 crore were filed during H1 FY23, down 10.6 per cent from 17,021 applications involving Rs 3,998 crore filed during H1 FY22 and 9.3 per cent from 16,778 applications amounting Rs 6,045 crore during the similar period in FY21.
Importantly, the delayed payment complaints filed by MSEs had increased significantly by 40 per cent from 24,496 in the entire FY20 to 34,314 in FY21 amid Covid. The growth in applications filed in FY22 however remained flat with 34,408 applications.
However, the number of applications disposed in the first six months of the current fiscal was significantly low. The data showed only 350 applications were disposed during H1 by by the facilitation councils, set up for settling payment disputes, vis-a-vis 1,589 applications disposed during H1 FY22, 3,184 applications in H1 FY21 and 3,503 applications in FY20.
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For the uninitiated, facilitation councils of a particular state direct the buyer unit for payment of the due amount after examining the case filed by the MSE along with interest as per the provisions under the MSMED Act 2006.
“The (MSME) ministry has taken up the subject with the central ministries, CPSEs and state governments for the clearance of pending dues to MSEs. The government has taken many steps to get the dues payable to the MSMEs cleared by public sector units of State and central governments and is also following up with the state governments and union territories for timely disposal of such cases,” Minister of State for MSMEs Bhanu Pratap Singh Verma had said in the Rajya Sabha during this year’s monsoon session.
A recent study by the non-profit entity for promoting entrepreneurship Global Alliance for Mass Entrepreneurship (GAME) and analytics company Dun & Bradstreet (D&B) had noted that delayed payments is estimated to have Rs 10.7 lakh crore, amounting to 5.9 per cent of India’s gross value added (GVA), locked up annually.
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