According to the Vivad se Vishwas scheme announced in the Budget for FY24, 95% of the bid or performance security forfeited for failure to execute contracts is to be refunded without interest.
With the Budget proposing a slew of relief measures for the micro, small and medium enterprises (MSMEs), the government on Monday issued an order to ministries asking them to expedite certain refunds to them. Performance security or bid security and liquidated damages forfeited during the Covid-19 pandemic for failure to execute contracts will be refunded.
According to the Vivad se Vishwas scheme announced in the Budget for FY24, 95% of the bid or performance security forfeited for failure to execute contracts is to be refunded without interest. The relief is provided in all contracts for the procurement of goods and services, entered into by ministries, departments and central public sector enterprises with MSMEs.
As per the Office Memorandum issued by the Department of Expenditure to secretaries of all the ministries/departments of the Government of India and Chief Secretaries of all States and Administrators of Union Territories, relief would be provided in all contracts for the procurement of goods and services to MSMEs, which meet the criteria. According to the criteria, the contractor/ supplier should be registered as an MSME with the Ministry of MSME as on March 31, 2022. The original delivery period/ completion period was between February 19, 2020, and March 31, 2022.
The grant of relief would be monitored through Government e-Marketplace (GeM). MSME vendors would be able to register on GeM portal and enter details of the applicable contracts. The portal will notify the nodal officers of each procuring entity to verify the claim of the MSME vendor. After due diligence, the nodal officer will refund the due amount and update the portal with the amount, date and transaction details of the payment. The portal will also provide reports to track the pendency with each procuring entity.
The date of commencement of the process of applications for relief through GeM will be notified separately.
Besides Vivad se Vishwas, finance minister Nirmala Sitharaman pledged a raft of steps in the Budget for FY24, including a revamped credit guarantee scheme and presumptive taxation benefits, in a bid to lift the fortune of the country’s 63.4 million MSMEs that account for a bulk of the jobs.