Jammu MSMEs struggle for credit due to “payment at convenience” attitude of PSUs

Jammu, July 1 (KNN) The MSMEs from Jammu have as much as Rs 20 crore pending with the large companies to whom they supply materials. The stuck payment has not only locked their working capital but has also made getting fresh loans difficult for them due to delayed-repayment of loans to banks.

The MSMEs said that delayed payments by the PSUs have led to the unit holders with no money for working capital, payment of labourers, payment of power bills, purchase of raw materials.

In this regard, an urgent meeting of executive committee of BBIA (Bari Brahmana Industries Association) was held in Jammu.

The members in the meeting  raised serious concerns  with respect to the non release of funds of small scale units for supply of material to PHE, PDD and other government departments amounting to the sum to Rs 20 crore approximately. 

Talking to KNN,  Lalit Mahajan, President, BBIA said, “The non-release of funds have four small scale units involved namely Samrat Ferro Alloys private limited, Kashmir tubes, Samrat surgical private limited and Jammu chemical. The delayed payments have been constantly  procastinated by the government departments since last 3-4 months. This means that the payment of the material which was sent in April has still not been settled.”

“Every time we contact them, their answer remains the same. They claim to be suffering from  a shortage of funds . Thus, often SMEs are told to be given he funds once arrangements are made,” he explained.

“The main problems this consistent delay leads  to are that the loans required for purchasing  the raw material gets stuck midway,” he said adding that the banks which charge 13%-14% interest often due to delayed payment becomes apprehensive about the SME’s credibility to repay the loan.

“Though the payment act of MSMEs strictly calls for the payment settlement within 45 days after the delivery is made . But no government department is following this act in J&K. The payment is made by the government departments only when they feel convenient,” the President said .

In this context, BBIA has soughted immediate intervention of J&K Finance Ministry and Industries and Commerce Minster Chander Prakash to issue necessary instructions to the concerned departments to clear the pending payments of the industrial units in J&K at the earliest. (KNN/GK/FA)