A few years after Swati Purakayastha won the Women Scientist Award from the department of science and technology for her work on renewable energy systems, the Kolkata-based scientist turned entrepreneur to set up Optimal Power Synergy in 2007 to design and manufacture inverters and control systems for renewable energy projects. By 2015, Optimal, registered as a micro, small, and medium enterprise (MSME), was competing with Schneider Electric for leadership position in India’s market for microgrid controllers. Optimal’s customers included the Indian military and coast guard, several government-owned enterprises, and large companies such as Reliance Industries.
However, one year ago, Optimal became a non-performing asset for banks, as it struggled to collect payments for several marquee government contracts.
Public sector units, such as Bharat Heavy Electricals Ltd (Bhel), Kerala’s State Electronics Development Corp. Ltd (Keltron), and Rajasthan Electronics and Instruments Ltd (Reil), are yet to pay Optimal for services and products sold nearly a decade ago. Optimal sold products for ₹66 lakh to Bhel in 2011 and is still waiting for the payment. A 28-month-long arbitration proceeding through an MSME facilitation council ruled in Optimal’s favour, awarding it ₹2.78 crore in unpaid dues, and interest. The payment should have come in 30 days of the order in November 2019 hasn’t yet been made by Bhel.
Optimal’s dues from government-owned companies total nearly ₹5 crore. “We are basically on the verge of closure because of non-payment from central and state public sector units, namely, Bhel, Keltron, and Reil,” said Purakayastha, managing director, Optimal Power Synergy India. “We have 56 staff members and cannot make payments to the Employees’ State Insurance Corporation. We’re not able to service our current projects either,” she said.
India’s small business owners have been in dire straits for a few years now and the 75-day national lockdown appears to have tipped them over the edge. Many are struggling to keep businesses afloat as demand disappears and customers try to conserve cash in an uncertain world. Business owners said if governments pay the dues on completed work, much of this working capital pressure can be eased.
On 15 May, Nitin Gadkari, Union minister for MSMEs, said in a TV interview that the central and state governments, public sector units and the private sector have to pay small business owners outstanding dues of ₹5 trillion.
The government-run MSME Samadhaan website, which monitors delayed payments, does not give a true picture of the crisis MSMEs are facing, Gadkari said. Despite this, the website shows 18,897 cases were filed by MSMEs to collect outstanding dues of ₹4,500 crore.
