Economy

Public Sector Enterprises clear dues worth ₹13,400 cr. to MSMEs

Union MSME Minister Nitin Gadkari. File photo  

The government on Monday said Central Public Sector Enterprises (CPSE) have cleared payments to the tune of ₹13,400 crore owed to Micro, Small and Medium Enterprises (MSME) in the last five months and ₹3,700 crore was paid to the units in September alone.

The MSME Ministry has now written to top management of over 2,800 corporates by name to make payment of pending dues of MSMEs in this month itself, an official statement said.

Last month, the ministry had written to the top 500 corporates of India about the pending dues.

In its latest communication to large corporates, the MSME Ministry underscored the importance of making such payments now and said that it will facilitate the small enterprises to avail business opportunities in the coming festival season.

The ministry said that if the cash flows of MSMEs improve, they can make use of the festival season when there is opportunity to earn by supplying goods and services.

“In fact, some of the MSMEs look for such a period for their sustenance of the whole year. Thus, timely payment of their receivables at this time will not only support the MSMEs and their dependents in this festive season but will also sustain many of them for a full year,” the statement said.

Therefore, the ministry has requested the corporates to see and make payment as soon as possible, preferably in the present month.

In addition, the ministry has also drawn attention of Corporate India towards important administrative, legal and Fintech-based provisions with regard to MSME payments.

The provisions state that it is ideal that payments are made in stipulated time. However, to solve the cash flow problems of MSMEs in absence of that, a bill discounting mechanism has been started by the Reserve Bank of India (RBI) in the name of TReDS.

It is mandatory for all CPSEs and the companies with turnover of more than ₹500 crore to join this platform. However, many companies are yet to join or transact on it. Corporates have been requested to check whether their group/ company has joined the TReDS platform and is doing transactions.

The ministry also reminded the corporates of the legal provision under the MSME Development Act, 2006 which mandates to make the payment to MSMEs within 45 days.

“As per related regulations, the corporate entities are also supposed to file half-yearly returns with the Ministry of Corporate Affairs about the dues of MSMEs. In many cases, this too is not being done. The Ministry has requested the corporates for their attention and needful action on this also,” the statement said.

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Printable version | Dec 4, 2020 2:06:12 AM | https://www.thehindu.com/business/Economy/public-sector-enterprises-clear-dues-to-msmes/article32891793.ece

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