The Finance Minister announced stimulus package to boost liquidity availability to MSMEs with 100% Government Guarantee. This was a signalizing initiative to boost sentiments of MSMEs who have been facing the impact of COVID-19 lockdown. A major boost that would build sentiments of MSMEs are payment of dues to MSMEs.<\/p>\n
While there are several estimates of amounts due to MSMEs from the Government and PSUs, a quick poll by CII of MSMEs to whom payments are pending indicated that about 450 MSMEs reported delayed payments worth Rs. 1,819 crores of which Public Sector\/ Government Departments including State Departments owe MSMEs Rs 1,709 Crores and the private sector also owes about R S 110 crores to MSMEs, said Mr. Chandrajit Banerjee, Director General, CII.<\/p>\n
The sample CII poll revealed that about 32% of the outstanding to MSMEs have been delayed for more than 2 years and about Rs 895 crores are stuck in disputes. These need to be resolved soon to save the MSMEs from solvency, Mr. Banerjee added.<\/p>\n
Out of the total delayed payments amount, manufacturing contracts account for Rs 153 crores, services contracts account for Rs 723 crores and multiple sectors accounted for Rs 930 crores.<\/p>\n
Almost Rs 723 crores are delayed payments from services sector areas including EPC contracts (Rs 92 crores), Engineering contracts (35 crores), IT & ITES (47 crores), and other services (Rs 113 crores).<\/p>\n
Appreciating the FM\u2019s announcement to release all payments immediately, Mr. Banerjee said, CII suggests measures to alleviate the issue of pending payments to MSMEs including tax refunds and incentives;<\/p>\n
One, the government should monitor payment delays by CPSUs to MSMEs closely through a portal for complaints and ensure necessary funds are provided and utilized for this purpose.<\/p>\n
Two, all PSUs and Government Departments both at the Central and State Government levels must be encouraged or mandated to register themselves on TREDS.<\/p>\n
Three, in addition, to overcome the delays in payments to MSMEs due to disputes all pending GST refunds, should be cleared immediately<\/p>\n
Four, all incentives due to MSMEs under various central and state schemes should be released immediately.<\/p>\n
Five, banks should provide additional reconstruction term loans to MSMEs impacted by the lockdown, with the Government of India offering a guarantee up to 20 percent of the default.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Finance Minister announced stimulus package to boost liquidity availability to MSMEs with 100% Government Guarantee. This was a signalizing initiative to boost sentiments of MSMEs who have been facing the impact of COVID-19 lockdown. A major boost that would build sentiments of MSMEs are payment of dues to MSMEs. While there are several estimates<\/p>\n