Ease of Doing Business for MSMEs: Even as the government has been urging central and state departments, public sector units (PSUs), and other individuals to clear payments to micro, modest, and medium enterprises inside 45 days of receipt of goods, the quantity of delayed payment applications filed by MSMEs has only grown additional. In almost 4 years considering the fact that the launch (October 30, 2017) of the delayed payment monitoring portal MSME Samadhaan, the quantity of applications has currently crossed the 90,000-mark. A total of 90,906 applications involving Rs 24,309.65 crore had been filed as of October 3, 2021, official information showed. Of these applications, almost 28,000 applications (30 per cent) had been filed in small more than the previous nine months. As of December 23, 2020, 63,184 applications involving Rs 18,036.22 crore had been filed.
Out of the total applications filed, only 10 per cent (9,381) applications involving Rs 1,685 crore had been disposed by the Micro and Small Enterprise Facilitation Councils (MSEFCs), even though only 9.8 per cent (8,939) applications had been mutually settled with purchasers, information from the portal showed. Moreover, almost 39 per cent (29,823) applications had been but to be seen by MSEFC even though 27 per cent (24,639) situations had been at present below MSEFC consideration. 20 per cent (18,124) applications involving Rs 3,703 crore had been rejected by the council.
“There are a lot of issues. One of them is the sheer bureaucratic approach by all government organisations. Another challenge is that most MSMEs are not well versed with digital platforms and government processes etc. While the government had made a policy for buyers to clear MSME payments in 45 days, but if MSMEs are not paid in that period then it would never be going to solve this issue for MSMEs,” Sanjiv Layek, Executive Secretary, World Association For Small And Medium Enterprises (WASME) had told TheSpuzz Online.
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MSEFCs are primarily dispute settlement units established by state governments in their respective geographies to resolve delayed payment problems. After MSE files an application against the purchaser prior to the concerned MSEFC of its state, the MSEFC examines it and accordingly problems directions to the purchaser for payment of due quantity along with interest as per the provisions below the MSMED Act 2006. According to MSME Samadhaan, every single reference made to MSEFC has to be decided inside a period of 90 days from the date of generating such a reference. The Department of Expenditure had in July last year issued an Office Memorandum asking purchasers to spend penal interest of 1 per cent per month for delayed payments beyond the prescribed duration.
Despite issues of MSEs, the government had earlier mentioned that it can’t ‘issue directions’ to purchasers to clear payments. Former MoS Finance Anurag Singh Thakur had informed Lok Sabha in February this year that even though “The Ministry has taken up the subject (delayed payments) vigorously with the Central Ministries, Central Public Sector Enterprises (CPSEs) and State Governments and the Corporate entities. But, it is to be noted that the Central Government cannot issue any directions to, or force, State Governments or State PSEs to pay the dues.”