MSME Ministry settles Rs 531.69 cr out of Rs 3,774.36 cr delayed payments

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03/02/2020 11:45am

MSME Ministry settles Rs 531.69 cr out of Rs 3,774.36 cr delayed payments

New Delhi, Feb 3 (KNN) As per the Micro Small and Medium Enterprises (MSME) Samadhaan, out of Rs 3,774.36 crore of 11,619 claims filed by MSMEs so far, only 14 per cent of the amount has been settled, which is Rs 531.69 crore in 2,547 cases.

''Of these, about 14 per cent has been settled, while the rest are under various stages of hearing. Acceleration on resolving issues would be important,” said a January 2020 report by Assocham and Crisil named Fastening MSME Fortunes.

The government has again taken cognizance of the delayed payments problem as the Finance Minister Nirmala Sitharaman in her second budget speech on Saturday announced that an “app-based invoice financing loans product will be launched.

''The app-based invoice financing loans product will obviate the problem of delayed payments and consequential cash flows mismatches for the MSMEs,” Sitharaman had said.

To address and facilitate payments due to small businesses by government departments, ministries, MSME Samadhaan portal was launched in October 2017.

During the launch, the government had said that the information (about delayed payments) on the (Samadhaan) portal will be available in public domain, thus exerting moral pressure on the defaulting (government, public sector) organisations.

In December last year, The Federation of Indian Micro and Small & Medium Enterprises (FISME) had emphasised to establish 'Payment Act' to ensure timely payments by the government and large companies to MSMEs.

"Payment is not considered the essence of Contract while the ‘delivery of goods or services within the time agreed upon’ is, delay in payment to suppliers by Govt and by large corporates to MSMEs is endemic,” industry body FISME said in its pre-budget memorandum before the Finance Minister recently.

''Most western countries have plugged the loophole by enacting Payment Acts. India can also have its own Payment Act to ensure agreed terms of payment," FISME added.