GAME suggests creation of National Platform to tackle MSME delayed payments in new report

New Delhi, Mar 3 (KNN) Chief Economic Advisor (CEA) to the Government of India, Dr V Anantha Nageswaran on Friday launched the Delayed Payments Report 2.0 titled 'Imagining Solutions to Unlock Working Capital for MSMEs' by Global Alliance for Mass Entrepreneurship (GAME) and Collaborative Cash Flow Optimization (C2FO).

The report recommends a coordinated, ecosystem-wide effort with three central pillars at the head: Government and Policy Makers, Finance Enablers and Financiers, and Large Enterprises (including PSUs) to address the various issues leading to delayed payments.

It aims to resolve Indian MSME’s financial crisis, as well as focus on creating an additional 10 crore jobs by 2030.

Commenting on the report, Nageswaran, said, “Delayed Payments is an issue that can only be tackled over time by maintaining a constant pressure. It is also an issue that remains to be resolved not only in India, but several countries across the globe.”

Referring to the 2023-24 budget, he said the government has made it clear that payments to MSME suppliers cannot be claimed on an accrual basis and cannot be set off against taxable income unless the payment is actually made.

“That makes it clear that companies cannot have their cake and eat it too. Without a vibrant MSME sector, we cannot talk of India becoming a global economic power,” added the CEA.

Ravi Venkatesan, Founder, Global Alliance for Mass Entrepreneurship (GAME) said, "Most MSMEs grapple with financial assistance, lack of mentoring support to scale the business, and technological obsolescence. Enterprises can become efficient and create more jobs if they have access to markets, finance & technology, and strategy to be competitive. Uninterrupted cash flow is a pre-requisite, and GAME's Delayed Payment 2.0 proposes a four-point solution to enable MSMEs to succeed, and the Indian economy continues to expand.”

Alexander Kemper, Founder & CEO, C2FO, pointed out that delayed payments and the lack of formal financing can adversely impact a nation’s potential to create jobs.

“Through this report, we have suggested solutions that leverage the India stack (Account Aggregator, GST), simplify credit guarantee schemes, and create the right incentives for buyers and sellers to remediate this crippling issue,” added Kemper.

The report serves as evidence of lakhs of businesses not being part of the formal economy, thereby never having had access to credit.

The report was co-authored by C2FO and GAME with extensive discussions and inputs from BB Swain and Ajeet Singh of MSME Ministry, Sharad Sharma, Co-founder, iSPIRIT, Vivek Malhotra, Chief General Manager, SIDBI, Anil Bhardwaj, Secretary General, FISME, Adarsh Kumar, Senior Agribusiness Specialist with the Food and Agriculture Global Practice, World Bank and Rajesh Kumar, Managing Director & Chief Executive Officer, Transunion CIBIL.

Access report here https://massentrepreneurship.org/wp-content/uploads/2023/03/Delayed-Payments-Report-2.0.pdf   (KNN Bureau)