Nitin Gadkari expresses concern over delayed payments to MSMEs; says the sector is on verge of collapse

New Delhi, Mar 20(KNN) Union Minister of Micro Small and Medium Enterprises (MSMEs) Nitin Gadkari has expressed concern over the delayed payment to MSME sector and said that the sector is on the verge of collapse.

“Government undertakings procure products but do not pay for three-four months. MSMEs are on the verge of collapse. Passing a legislation is easy….There are 20,000-22,000 cases," Gadkari said in the Rajya Sabha on Thursday.

''As per my estimates, big industrialists, state government, central government undertakings owe Rs 5.5 lakh crore to Rs 6 lakh crore to small industries,'' he added.

The Minister also informed that government is working on an action plan to ensure the payments within three months.

This is a serious situation. We are in discussion with the Finance Ministry and we will find out some solution to it…. We have to give their payments within three months,” he added.

While commenting on loans to MSME sector, the minister said earlier funding under MSME was limited to only scheduled banks but now all banks, NBFCs and cooperative banks can lend to them.

''All banks — scheduled, private, cooperative and NBFC — are now allowed to lend money to the MSME sector and all loans sanctioned and disbursed under various schemes will be monitored through a central portal in his ministry,'' the Minister added.

The Minister further said that a proposal to create a “Fund of Funds” of Rs 10,000 crore has been approved by the Finance Ministry and the Cabinet nod will be sought on it.

In addition, the Finance Ministry has approved a proposal for a “Distressed Asset Fund” of Rs 10,000 crore and the Ministry will send it for the Cabinet nod, he added.