Credit and Finance for MSMEs: The amount involved in delayed payment applications filed by micro and small enterprises (MSEs) since the launch of the government’s delayed payment monitoring system MSME Samadhaan on October 30, 2017, has crossed a whopping Rs 30,000 crore. The data available on the portal showed that MSEs have filed over 1.20 lakh applications involving Rs 30,776 crore in the past nearly five years.
Out of the total applications filed so far against delay in payments by central and state public sector units, departments, and other buyers, 50 per cent or 60,984 applications involving Rs 17,821.16 crore were still pending while only 25.4 per cent of applications amounting to Rs 5,046.25 crore were closed including cases disposed of by facilitation councils and applications mutually settled by MSEs and their buyers.
Particularly post Covid, the amount involved in pending applications during FY22 nearly doubled from the amount stuck pre-Covid. The amount stood at Rs 5,685 crore in FY22, up 97 per cent from Rs 2,887 crore stuck in pending applications filed in FY20. In comparison to FY22, the amount pending during FY21 stood at Rs 5,747 crore, according to the data shared by the Minister of State (MoS) for MSMEs Bhanu Pratap Singh Verma in the Parliament earlier this month.
“The ministry has taken up the subject with the central ministries, CPSEs and state governments for the clearance of pending dues to MSEs. The government has taken many steps to get the dues payable to MSMEs cleared by public sector units of state and central governments, and is also following up with the state governments and union territories for timely disposal of such cases,” Verma had said.
Among buyers, 14,581 applications amounting to Rs 1,225.24 crore filed against proprietorships were pending followed by MSME units (5,185 applications involving Rs 892.32 crore), state governments (4,264 applications involving Rs 3,144.88 crore), individual units (2,090 applications amounting to Rs 208.41 crore), and more, data from the Samadhaan portal showed.
Delayed payment is among the biggest concerns for MSMEs that hurts their working capital cycle and market competitiveness. According to 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.
Importantly, the number of applications filed on the Samadhaan portal by MSEs had crossed the 1-lakh mark in January this year.