Credit and Finance for MSMEs: The quantum of delayed payment applications rejected by Micro and Small Enterprise Facilitation Councils (MSEFCs) has jumped 74 per cent so far due to the fact March 2020. MSEFCs, which are established by state governments and facilitate settlement of disputes on delayed payments for micro and little enterprises (MSEs), have rejected 11,042 applications as of December 23, 2020, up from 6,346 rejected applications as of March 4, 2020, according to the government information sourced from delayed payment monitoring method MSME Samadhaan. Moreover, the quantity involved in rejected applications through the mentioned period was Rs 1447.17 crore and Rs 2330.58 crore respectively.
Out of 11,042 rejected MSE applications, the majority applications – 2,273 — for recovery of payments had been against proprietorship firms followed by 878 against people, 866 against other MSME units, 556 against a variety of state governments, 538 against central PSUs, and so forth. Central ministries and departments have a share of 118 and 151 rejected applications respectively. Applications for delayed payments filed by MSEs are examined by MSEFC of the respective state exactly where the enterprise is primarily based. After examining the case, MSEFC directs the purchaser unit to spend the due quantity along with interest as per the provisions below the MSMED Act 2006.
Also study: ESDP in 2020: Modi govt’s entrepreneurship improvement scheme sees practically 400% jump in trainees
Currently, purchasers are mandated to spend MSME dues inside 45 days of the acceptance of the goods or services they purchased. According to the MSME Ministry, just about every reference created to MSEFC has to be decided inside a period of 90 days from the date of generating such a reference as per provisions laid in the Act. Overall, 63,184 applications had been filed by MSEs as of December 23, 2020, involving Rs 18,036.22 crore out of which 5,094 applications involving Rs 827.22 crore had been disposed.
Meanwhile, according to the information shared by the MSME Ministry in November 2020, the month-to-month pending dues by the ministries and central public sector enterprises (CPSE) declined from 23.90 per cent in May 2020 to 20.65 per cent in October. This had reflected the boost in the ratio of month-to-month payments against the procurement created from 76.10 per cent in May to 79.35 per cent in October. While 25 ministries and 79 CPSEs had purchased goods worth Rs 2,346.82 crore in May, the quantity of purchasers also went up to 26 ministries, and one hundred CPSEs acquiring Rs 5,096.53 crore merchandise and services from MSMEs in October.