Steps Taken By Ministry To Clear Delayed Payments To Units Under MSME Sector

Anirudh Agarwal

July 27, 2023

Steps Taken By Ministry To Clear Delayed Payments To Units Under MSME Sector

Introduction
The Ministry of Micro, Small & Medium Enterprises (“Ministry”) has released a press note dated July 24, 2023, wherein, the Ministry has introduced certain steps to get the dues cleared by the public sector units of State and Union Governments to units under Micro, Small & Medium Enterprises (“MSME”) Sector.
The Ministry on October 30, 2017, launched a portal viz. Samadhaan Portal for filing of grievances and for monitoring of the outstanding dues to the Micro & Small Enterprises (“MSE(s)”)/strong> from the buyers of goods and services. Any MSE having a valid Udyam Registration can file before the concerned Micro, Small Enterprise Facilitation Councils (“MSEFC(s)”) of his/her State/UT. After the application is admitted by the MSEFC, it becomes a case. The MSEFC of the State, after examining the case filed by MSE unit will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”).
Key Developments
Following are some of the steps taken by the Government to get the dues cleared by the public sector units of State and Union Governments:

  • The Ministry of MSME launched Samadhaan Portal on October 30, 2017, for monitoring of outstanding dues to the MSEs from the buyers of goods and services.
  • The Ministry of MSME created a special sub-portal within Samadhaan Portal on June 14, 2020, after the Aatma Nirbhar Bharat announcements, for reporting the dues and monthly payments by Central Ministries/Department/Public Sector Enterprises to MSMEs.
  • The Ministry of MSME has requested States/UTs to set up more number of MSEFCs for quicker disposal of cases related to delayed payments. By far 152 (One Hundred and Fifty Two) MSEFCs have been set up with more than one MSEFC set up in states like Delhi, Jammu & Kashmir, Karnataka, Kerala, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, U.P. & West Bengal.
  • The Government of India has also instructed Central Public Sector Enterprises (“CPSEs”) and all companies with a turnover of INR 500 Crore (India Rupees Five Hundred Crore) or more to get themselves on-boarded on the Trade Receivables Discounting System (“TReDS”), an electronic platform for facilitating the discounting of trade receivables of MSMEs through multiple financiers.

Moreover, for the promotion and development of MSME Sector in the country, the Ministry had implemented numerous schemes and programmes such as (i) Prime Minister’s Employment Generation Programme; (ii) Credit Guarantee Scheme for Micro and Small Enterprises, Micro and Small Enterprises Cluster Development Programme, etc.

 
Conclusion
It is interesting to note that the steps undertaken by the Ministry to clear delayed payment in MSMEs is a great initiative in terms of filing online application by the supplier MSE unit against the buyer of goods/services before the concerned MSEFC of his/her State/UT. Such progressive steps by the Ministry is the need of the hour, not only to ensure that the buyer is making timely payment to the supplier for his supplies of goods or services but also to facilitate the promotion and development and enhancing the competitiveness of MSMEs.

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