Despite fall in pending MSME dues by ministries, CPSUs; these buyers are holding back majority payment

By: |
September 30, 2020 3:44 PM

Credit and Finance for MSMEs: 24 ministries and 86 CPSEs had reported Rs 3,770.04 crore total dues in August out of which Rs 2,936.08 crore dues were paid in the same month.

Government regulations mandate buyers to pay MSMEs within 45 days of the order acceptance.

Credit and Finance for MSMEs: Even as the payments due from central ministries and central public sector units (CPSUs) to MSMEs seemed to be declining, the overall amount stuck with different buyers including state government, state PSUs, railways, proprietorship firms, MSMEs, ordnance factories, others is quite high. According to the data from MSME Samadhaan portal, the total number of applications and applications converted into cases by MSE Facilitation Council (MSEFC) and pending for clearances stood at 37,520 involving Rs 12,597.64 crore as on September 30. The biggest categories of buyers in terms of pending dues were state governments (Rs 2,349 crore across 3,546 applications), CPSUs (Rs 2,171.74 crore in 2,211 applications), state PSUs (Rs 1,573.18 crore across 1,355 applications), proprietorship firms (Rs 851.97 crore in 6,483 applications) apart from others category wherein Rs 4,468.23 crore payment was pending across 18,441 applications.

24 ministries and 86 CPSEs had reported Rs 3,770.04 crore total dues in August out of which Rs 2,936.08 crore dues were paid in the same month, as on September 15, 2020, the data shared MoS MSME Ministry Pratap Chandra Sarangi in the Rajya Sabha showed. In comparison, the July dues and the amount cleared to small businesses stood at Rs 4,124.34 crore and Rs 3,155.16 crore respectively.

Also read: ESDP: Govt’s entrepreneurship development scheme sees over 350% jump in trainees in this many programmes

Government regulations mandate buyers to pay MSMEs within 45 days of the order acceptance while MSEFCs have to be decided within 90 days. MSEFCs were set-up by the government to resolve payment disputes filed by small businesses. The applications received from MSMEs are sent for examination to the respective MSEFC of the state or district, post which buyers are directed to pay MSMEs. Back in May this year, Finance Minister Nirmala Sitharaman had directed PSUs and ministries to clear MSME dues within 45 days. Also, the Department of Expenditure had issued an Office Memorandum in July for buyers to pay penal interest of 1 per cent per month for delayed payments. The Ministry of MSME had recently urged top 500 corporate groups in India to pay MSME dues “at the earliest,” as per a ministry’s statement.

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