Timely Payments By Large Firms Crucial To Ease MSME Working Capital Stress: CEA Nageswaran

New Delhi, May 12 (KNN) Chief Economic Advisor (CEA) V Anantha Nageswaran on Tuesday urged large companies to ensure timely payments to micro and small enterprises (MSEs) to ease their working capital constraints and reduce borrowing costs.

Speaking at the CII Annual Business Summit, he said bigger firms should promptly accept invoices raised by micro, small and medium enterprises (MSMEs) and clear dues without delays.

Rebalancing Financial Dynamics

Nageswaran said, "Larger enterprises in the country have to pledge to contribute to relieving the working capital requirements of micro and small enterprises,” PTI reported.

“Micro, small, and medium enterprises are the source of working capital for large enterprises. It should be the reverse. And because these enterprises have a much higher cost of capital," he added.

Boost to Innovation and Growth

The CEA noted that freeing up working capital for MSMEs would create a positive environment for innovation and expansion. Highlighting India’s large MSME base, he pointed out that many such enterprises continue to face challenges in scaling up and integrating into global value chains.

Push for Simpler Regulations

Nageswaran said the government is working towards building a supportive ecosystem for MSMEs. He emphasised the need for simple, transparent, and trust-based regulatory frameworks to enable sustained growth in the sector.

(KNN Bureau)