MSMEs Grapple with Unpaid Dues: 1.64 Lakh Applications Filed in 5 Years, Totaling Rs 39,058 Crore on MSME Samadhaan Portal

New Delhi, Nov 10 (KNN) Since the initiation of MSME Samadhaan five years ago, a total of 1.64 lakh applications have been submitted and these applications represent unpaid dues amounting to Rs 39,058 crore for micro and small enterprises, reported Financial express.

The government’s portal to monitor delayed payments to micro and small enterprises (MSEs) from their buyers was launched on October 30, 2017. The portal has so far facilitated the disposal of 32,628 cases (19.8 per cent of total applications) involving Rs 5,741 crore through MSE Facilitation Councils set up in every state. 

As per the information accessible on the portal, over the course of five years, 42,833 applications, constituting 26 percent of the total, were declined, accounting for Rs 8,200 crore. Additionally, 15,287 applications, amounting to Rs 1,949 crore, were mutually resolved between Micro and Small Enterprises (MSEs) and their buyers.

Presently, different councils are reviewing 35,476 cases, while an additional 38,301 cases are awaiting examination by the councils.

The data showed that the maximum applications of 39,613 filed by MSEs were against proprietorship firms followed by 13,394 applications against MSMEs buying goods from other micro and small units, 10,005 applications against different state governments, 5,952 applications against central public sector units, 3,286 applications against state public sector units, 2,339 applications against central government departments, 1,200 applications against central ministries, and more during the five-year period. 

To tackle the issue of delayed payments that adversely affect the working capital of MSMEs, the government has implemented various measures. These include directing CPSEs and companies with a turnover of Rs 500 crore or more to register on the Trade Receivables Discounting System (TReDS).

Furthermore, companies failing to make payments within 45 days of purchasing goods are mandated to submit a half-yearly report to the government, detailing the outstanding payment amounts and reasons for the delays. Additionally, buyers can only claim deductions under Section 43B of the Income Tax Act for expenses related to payments when the actual payment is made to MSMEs.

Moreover, following the government’s decision in 2020 to levy a 1 per cent penalty on government departments and agencies for delayed payments to vendors selling goods on the public procurement portal GeM, the portal’s CEO PK Singh had said in September that a provision to impose penal interest would be fully operational from the end of September, according to a PTI report.

(KNN Bureau)