Credit and Finance for MSMEs: Central ministries and central public sector enterprises (CPSEs) have cleared MSME dues worth Rs 26,821.08 crore through the May-December 2020 period, according to the Finance Ministry’s information. The total dues stood at Rs 34,506.09 crore though dues pending amounted to Rs 7,685.01 crore through the period. The highest procurement by 26 ministries and 105 CPSEs was produced worth Rs 6,499.92 crore in December out of which Rs 4,821.90 crore was cleared to MSMEs though Rs 1,678.02 crore was pending at the finish of the month. Ministry of Communications, Heavy Industries and Public Enterprises, Petroleum and Natural Gas, Steel, Power, Coal, and so on., had received the majority applications for delayed payments by micro and tiny enterprises, according to the most current information accessible at the delayed payment monitoring method MSME Samadhaan.
“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 mentioned in a written reply to a query in the Lok Sabha not too long ago sharing information on the dues cleared. The MSME Ministry had written to 500 corporates in September and a further 2,800 such organizations in October to clear pending MSME dues in the respective month.
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The procurement by ministries and CPSEs in December had elevated almost 3X from Rs 2,349.52 crore of goods and services procured from MSMEs in May, according to the information shared by Singh. While the Finance Minister Nirmala Sitharaman had asked government entities in May final year to clear MSME dues inside 45 days, the Department of Expenditure had issued an Office Memorandum in July mandating purchasers to spend penal interest of 1 per cent per month for delayed payments beyond the prescribed duration till the date of such payment.
The government had also urged purchasers to on-board the Trade Receivables Discounting System (TReDS) platform, which gives MSMEs an selection to discount their invoices and raise brief-term credit from banks to tide more than their delayed payment problem. According to the information shared by Singh, 4,72,035 invoices involving Rs 10,285 crore had been discounted by way of TReDs platform from April till December 2020.