Credit and Finance for MSMEs: Government departments, ministries and central public sector enterprises (CPSEs) have cleared MSME dues worth Rs 1,65,034.09 crore between May 2020 to December 5, 2022, informed Bhanu Pratap Singh Verma, Minister of State for MSMEs in a return reply to a question in the Lok Sabha on Thursday.
Moreover, the number of micro and small enterprise facilitation councils (MSEFCs) set up in states and union territories (UTs) by respective local governments has increased to 113 in the current fiscal from 79 in FY20. Importantly, states/UTs viz., Delhi, Jammu & Kashmir, Karnataka, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, etc., have more than one council. Verma informed that MSEs can file applications with councils for delayed payments.
MSEFCs are set up by the state governments for settling disputes on delayed payments filed by MSEs. The applications received are examined by the respective MSEFC of the state/district and for relevant applications, the buyers are directed to pay the amount along with the interest for failing to pay the amount within 45 days of acceptance of goods bought from MSEs. The council must decide upon the application within 90 days from the “date of making such a reference as per provisions laid in the MSME Act,” according to delayed payment monitoring portal Samadhaan.
Importantly, the number of applications filed on the Samadhaan portal by MSEs had crossed the 1-lakh mark in January this year, FE Aspire had earlier reported.
Delayed payment has been one of the biggest challenges facing MSMEs that impacts their working capital cycle and market competitiveness. As per a recent study by the non-profit entity for promoting entrepreneurship Global Alliance for Mass Entrepreneurship (GAME) and analytics company Dun & Bradstreet (D&B), the problem of delayed payments faced by small businesses 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.