Credit and Finance for MSMEs: Out of 51,174 delayed payment applications filed by micro and small enterprises (MSE) to Micro and Small Enterprise Facilitation Councils (MSEFC), only 3,367 have been disposed by the council so far even as 8,468 applications involving Rs 1,830.99 crore payable have been rejected, showed the government data. According to the total applications filed by MSEs, payments worth Rs 14,947.66 crore have been delayed by buyers including central ministries, departments, PSUs, railways, ordinance factory, state governments and PSUs, MSME units, individual firms, and proprietorships, apart from other categories, as per the data available on delayed payments monitoring portal MSME Sambandh. The real-time data showed that the amount involved in cases disposed was Rs 915.96 crore while the actual settled amount by MSEFC was Rs 674.55 crore at the time of filing this report.
MSEFCs were set-up by the government for settling disputes on delayed payments filed by MSEs. After the applications are received, they are sent to be examined by the respective MSEFC of the state/district. For, relevant applications, the buyers are directed to pay the amount along with the interest for failing to pay the amount within 45 days of acceptance of goods bought from MSEs. The council has to decide upon the application within 90 days from the “date of making such a reference as per provisions laid in the MSME Act,” according to the portal.
The maximum applications – 8,842 involving Rs 1,085 crore have been filed against proprietorship firms followed by state governments against which 4,368 applications involving Rs 2,525.51 crore amount payable, MSME units (3,609 applications with Rs 504.74 crore amount payable), central PSUs (3,178 involving Rs 2,398.18 crore payable), individual businesses (2,060 with Rs 184.41 crore payable), and others. Moreover, 4,389 applications filed were for mutual settlement between buyers and sellers out of which 3,599 applications have been mutually settled with Rs 423.20 crores vis-à-vis Rs 563.49 crore initially payable in these 3,599 applications. The applications ready for consideration by MSEFC were 20,578 involving Rs 6,349.39 crore amount payable.
The government has repeatedly urged buyers to clear payments to MSEs on time however the challenge of delayed payments continues to stress working capital flow for small businesses particularly amid Covid and following lockdown. MSME Minister Nitin Gadkari had also urged chief ministers of all states earlier this week to ask their state or union territory ministries and departments along with public sector units to clear on priority.
