Credit and Finance for MSMEs: While the Finance Minister Nirmala Sitharaman had asked government entities in May to clear MSME dues within 45 days, the Department of Expenditure had issued an Office Memorandum in July asking buyers to pay penal interest of 1 per cent per month for delayed payments beyond the prescribed period.
Credit and Finance for MSMEs: Even as MSMEs continue to struggle to recover their dues from buyers including government departments, public sector units, over Rs 6,800 crore stuck in delayed payments “have been paid by the ministries and central public sector enterprises (CPSE) in the last three months,” according to MSME Ministry. In fact, according to the ministry, nearly three-fourth of the monthly dues have been paid during the same month by “most of the central ministries and CPSEs.” The remaining pending sum is likely to be “in the normal course of business and below 45 days.” The buyer is liable to pay for goods purchased within 45 days of the acceptance of the order while complaints made to MSE Facilitation Council (MSEFC) should be decided within 90 days.
While the Finance Minister Nirmala Sitharaman had asked government entities in May to clear MSME dues within 45 days, the Department of Expenditure had issued an Office Memorandum in July asking buyers to pay penal interest of 1 per cent per month for delayed payments beyond the prescribed duration.
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To ensure timely payments to MSMEs, the government had in October 2017 launched delayed payments monitoring portal MSME Samadhaan for small businesses to file an online application against the buyer before the concerned MSEFC of the state or union territory for necessary action. According to the portal that provides a real-time update on applications, a total of 53,070 applications have been filed involving Rs 15,452 crore. 3,798 applications have been disposed by MSEFCs involving Rs 702.96 crore while 9012 applications have been rejected that involved Rs 1,934.27 crore. 4,623 cases have been mutually settled involving Rs 700.58 crore.
“The Ministry of MSME followed up this announcement (by Sitharaman) vigorously and took up the matter with the central ministries, CPSEs and state governments. Particularly very active follow up has been done with the Heads of CPSEs,” said a statement by the ministry. Last month, MSME Minister Nitin Gadkari had also urged chief ministers of all states to ask their state or UT ministries and departments along with PSUs to clear pending payments to MSMEs on priority.