Credit and Finance for MSMEs: Even as the Modi government intends to resolve the delayed-payment challenge for compact organizations, the quantity of situations filed in the MSE Facilitation Councils (MSEFCs) by micro and compact enterprises (MSEs) has almost doubled more than the previous 12 months. From 13,091 delayed-payment situations filed against the respective central ministry, division, CPSE, or state government, as of April 27, 2020, because the launch of delayed payment monitoring technique MSME Samadhaan on October 30, 2017, the quantity has jumped 96 per cent to 25,705 applications as of April 13, 2021, according to the government information. The quantity payable in the quantity of situations filed also enhanced 125 per cent from Rs 4,112 crore to Rs 9,250 crore throughout the mentioned period, information from MSME Samadhaan showed. Nonetheless, the quantity of resolved situations has also more than doubled from 3,145 involving Rs 598 crore to 6,643 involving Rs 1,075 crore.
“While the challenge of delayed payments will continue to exist but it has been resolved to a great extent over the past few years as the government has enhanced focus on ensuring MSMEs don’t face such problems. The issue persists because often buyers are reluctant of paying on time while sellers too hesitate in pushing them for payments as they fear their future orders might get rejected by buyers. While payment is delayed but it is never lost. Buyers know that now somebody is watching them,” Vishwa Nath, Co-Chair, Industry Affairs Committee, PHD Chamber of Commerce and Industry told TheSpuzz Online.
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MSEFCs are dispute settlement units established by state governments in their respective geographies to resolve problems about delayed payments faced by compact organizations. MSMEs can file applications for delayed payments against the purchaser just before the concerned MSEFC of their state. The MSEFC soon after examining the case problems directions to the purchaser unit for payment of due quantity along with interest as per the provisions beneath the MSMED Act 2006. According to MSME Samadhaan, each and every reference produced to MSEFC has to be decided inside a period of 90 days from the date of producing such a reference. The Department of Expenditure had in July final year issued an Office Memorandum asking purchasers to spend penal interest of 1 per cent per month for delayed payments beyond the prescribed duration.
However, the government can’t force purchasers to clear MSME dues. “The Ministry has taken up the subject 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,” MoS Finance Anurag Singh Thakur had mentioned in a written reply to a query in the Lok Sabha in February this year. The MSME Ministry had written to 500 corporates as properly in September and an additional 2,800 such organizations in October to clear pending MSME dues in the respective month.