Govt portal for helping MSMEs get their dues appears ineffective; settlement rate remains low

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Published: February 3, 2020 2:20 PM

Credit and Finance for MSMEs: Delayed MSME payments monitoring portal MSME Samadhaan, which was launched in October 2017 to facilitate payments due to small businesses by government departments, ministries etc, seems to have made little headway.

MSME Joint Secretary Sudhir Garg had earlier told Financial Express Online that the Samadhaan portal is increasingly settling claims on a daily basis.

Delayed MSME payments monitoring portal MSME Samadhaan, which was launched in October 2017 to facilitate payments due to small businesses by government departments, ministries etc, seems to have made little headway. Out of Rs 3,774.36 crore of 11,619 claims filed by MSMEs so far, only 14 per cent of the amount has been settled, which is Rs 531.69 crore in 2,547 cases, as per the portal. “The information (about delayed payments) on the (Samadhaan) portal will be available in public domain, thus exerting moral pressure on the defaulting (government, public sector) organisations,” MSME Ministry had said during the launch of the scheme.

“Of these, about 14 per cent has been settled, while the rest are under various stages of hearing. Acceleration on resolving issues would be important,” said a January 2020 report by Assocham and Crisil named Fastening MSME Fortunes. While the portal has been slow in settling MSME claims, the government has again taken cognizance of the delayed payments problem. Nirmala Sitharaman in her second budget speech on Saturday announced that an “app-based invoice financing loans product will be launched” which will “obviate the problem of delayed payments and consequential cash flows mismatches for the MSMEs,” Sitharaman had said.

Also read: Budget 2020: No more auditing of MSMEs if revenue is below this; loan restructuring may extend by 1 year

Nonetheless, MSME Joint Secretary Sudhir Garg had earlier told Financial Express Online that the Samadhaan portal is increasingly settling claims on a daily basis. “Whatever problems MSMEs are sharing on the portal, are getting solved increasingly day by day. The portal has been well received by MSMEs. We have received a positive response from MSMEs regarding the portal,” the minister had said in October on the sidelines of an event in Delhi.

MSME body FISME in its budget presentation compiling recommendations had asked for enacting a Payment Act in the budget to ensure timely payments by the government and large companies to MSMEs. “As ‘payment’ is not considered the essence of Contract while the ‘delivery of goods or services within the time agreed upon’ is, delay in payment to suppliers by Govt and by large corporates to MSMEs is endemic,” FISME had said.

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