Incorrect to conclude that majority of MSMEs receive payment only after 90 days or more: Giriraj Singh
Updated: Nov 30, 2015 04:49:12pm
New Delhi, Nov 30 (KNN) Though delayed payments is a major problem faced by the MSMEs, it is not correct to conclude that majority of MSMEs receive payment only after 90 days or more from large enterprises, said Minister of State, Micro, Small and Medium Enterprises, Giriraj Singh.
Meanwhile, according to a study conducted by KNN research team, which studied latest available annual reports of more than 2700 Companies derived the overwhelming figure of Rs 10,000 crore of overdue to the micro and small enterprises.
Another interesting fact is most of the Companies holding Rs 100 Crore and above of MSE payments are so called blue chip Companies in both the private and public sector and majority of them are in manufacturing business.
The Minister, in a written reply, said that, “To overcome the problem of delayed payments, Ministry of MSME has established Micro and Small Enterprise Facilitation Councils (MSEFCs). As per provisions of chapter V section 18 of MSMED Act, 2006, every reference made to MSEFC should be decided within a period of 90 days from the date of making such reference. The Government continuously follows up the matter with the State Government /UT Administration for timely disposal of the case.”
Meanwhile, the banks and the entrepreneurs have been mentioning about the widespread sickness in the MSMEs due to held up payments.
In fact, Government is already aware about the burgeoning overdue of the MSMEs from the large enterprises and widespread sickness in the sector due to the same.
In 1993, Government enacted the Delayed Payment Act with a provision for small scale industries to charge penal rate of interest on outstanding payments if the same are delayed beyond the agreed or stipulated period of time.
The Act had been further amended to make the stipulations more stringent and finally it was included as a section in the umbrella MSME Development Act 2006. The 2006 Act stipulates publishing of the overdue payments to the micro and small enterprises in the Annual Reports of all registered Companies. (KNN Bureau)
Meanwhile, according to a study conducted by KNN research team, which studied latest available annual reports of more than 2700 Companies derived the overwhelming figure of Rs 10,000 crore of overdue to the micro and small enterprises.
Another interesting fact is most of the Companies holding Rs 100 Crore and above of MSE payments are so called blue chip Companies in both the private and public sector and majority of them are in manufacturing business.
The Minister, in a written reply, said that, “To overcome the problem of delayed payments, Ministry of MSME has established Micro and Small Enterprise Facilitation Councils (MSEFCs). As per provisions of chapter V section 18 of MSMED Act, 2006, every reference made to MSEFC should be decided within a period of 90 days from the date of making such reference. The Government continuously follows up the matter with the State Government /UT Administration for timely disposal of the case.”
Meanwhile, the banks and the entrepreneurs have been mentioning about the widespread sickness in the MSMEs due to held up payments.
In fact, Government is already aware about the burgeoning overdue of the MSMEs from the large enterprises and widespread sickness in the sector due to the same.
In 1993, Government enacted the Delayed Payment Act with a provision for small scale industries to charge penal rate of interest on outstanding payments if the same are delayed beyond the agreed or stipulated period of time.
The Act had been further amended to make the stipulations more stringent and finally it was included as a section in the umbrella MSME Development Act 2006. The 2006 Act stipulates publishing of the overdue payments to the micro and small enterprises in the Annual Reports of all registered Companies. (KNN Bureau)
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