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Dues of Rs 22,316 crore owed to MSMEs to be cleared in 45 days

FM Nirmala Sitharaman told parliament she is personally monitoring the clearance of delayed payments to MSMEs for purchases by the Central government, public sector undertakings and central departments

 

Applications to settle delayed payments to the tune of Rs 22,315.95 crore to small businesses in the country will be approved in 45 days, the government said.

An estimated 29,081 delayed payment applications have been filed through state MSE Facilitation Councils against central ministries, government departments and central public sector enterprises and are pending, according to data on MSME Samadhaan, a government portal that tracks these transactions.

The Centre will clear all dues to micro, small and medium enterprises (MSMEs) within 45 days, finance minister Nirmala Sitharaman said on July 26.

“I am personally monitoring this,” the minister said during Question Hour in Parliament on July 26, while clarifying the government’s position on clearing dues owed to MSMEs by the Centre and its public sector undertakings.

Of the total applications filed by MSMEs, 6,347 are for payments of Rs 3,514 crore from state governments, 4,077 for payments from Central PSUs (Rs 3,174 crore) and 1,465 applications for payments from Central departments (Rs 554 crore).

There are 866 applications for payments totalling Rs 355 crore from central ministries, mainly the railway, atomic energy, electronics and IT, petroleum & natural gas, and information & broadcasting ministries.

Of 202 applications filed against the railway ministry, the MSE Facilitation Councils have disposed of only seven, while 36 were rejected and 47 were mutually settled.

The disposal rate was better for other ministries. Of 67 applications against the ministry of atomic energy, seven were cleared by MSEFCs, 18 were rejected and 27 were mutually settled. For the ministry of electronics & IT, 14 applications were disposed of out of 64 applications, 12 were rejected and five were mutually settled.

MSEFCs have disposed of 81 out of 866 applications against central ministries so far, while 170 were rejected and 191 were mutually settled.

Of the 6,347 delayed payment applications amounting to Rs 3,514 crore filed against state governments, the highest number was 1,048 against Rajasthan amounting to Rs 311 crore, followed by Uttar Pradesh (730 cases), Madhya Pradesh (660), Maharashtra (643) and Andhra Pradesh (368).

MSME Samadhaan is a delayed-payment monitoring portal. It is governed by Micro and Small Enterprise Facilitation Councils at the state level for settlement of disputes arising out of delayed payments to MSEs by government departments, ministries and central public sector enterprises. Under MSME Samadhaan, after a case is referred to a state MSEFC, a decision has to be made within 90 days.

If payment is delayed beyond 45 days, MSEs can approach MSEFCs to fast-track the settlement of dues. MSMEs have to file applications for delayed payments against the buyer with the MSEFC in their state.

After examining the case, the MSEFC directs the purchaser to pay the dues along with interest.

The MSME Samadhaan portal was launched in October 2017 by then MSME Minister of State Giriraj Singh.