Credit and Finance for MSMEs: Dues worth Rs 77,000 crore to micro, small and medium enterprises (MSMEs) have been cleared during the Covid period so far since May 2020, according to the data shared by MSME Minister Narayan Rane on microblogging site Twitter. The information was shared by the minister highlighting MSME-related initiatives taken by the Modi government as the latter completed eight years in office on May 30.
The dues cleared are likely to be on-time payments to MSMEs as the minister didn’t mention about delayed payments made to MSMEs. Also, the information didn’t clarify whether the dues cleared also involved payments from state government departments, state public sector units, private buyers etc. Generally, government PSUs are referred to only the central government units and departments.
Importantly, in a video conference with the members of the Calcutta Chamber of Commerce in May 2020, according to a PTI report, the former MSME Minister Nitin Gadkari had said, “State governments, their ministries and public sector undertakings, Government of India, its ministries and undertakings, and major industries combined owe an estimated Rs 5 lakh crore to MSMEs, money that is stuck and not cleared.”
Meanwhile, as per the delayed payment monitoring portal of the government MSME Samadhaan, 1.14 lakh applications have been filed by micro and small enterprises, since the launch of the portal in October 2017, against the delay in payments cleared by their buyers. Out of total applications filed, only 16,716 applications involving Rs 3,126 crore were disposed by MSE Facilitation Councils (MSEFCs), as of June 12, 2022. MSEFCs are essentially dispute settlement units set up by state governments in their respective geographies to resolve delayed payment issues.
While the government has been urging buyers to pay MSMEs on time, Former MoS Finance Anurag Singh Thakur had informed Lok Sabha in February last year that “the Central Government cannot issue any directions to, or force, State Governments or State PSEs to pay the dues.”