OPEN APP
Home / Politics / Policy /  CPSEs clear dues worth 13,400 crore to MSMEs in last 5 months: Government

CPSEs clear dues worth 13,400 crore to MSMEs in last 5 months: Government

Last month, Ministry of MSME had written to top 500 corporates of India about the pending payments of MSMEs. (Bloomberg)Premium
Last month, Ministry of MSME had written to top 500 corporates of India about the pending payments of MSMEs. (Bloomberg)

  • With CPSEs paying 3700 crore to MSMEs in September 2020; the highest in a month, takes total payment to 13400 crore in last 5 months
  • MSME Ministry writes to over 2800 corporates to clear MSME dues

NEW DELHI : The government on Monday said central public sector enterprises have cleared payments to the tune of 13,400 crore owed to micro, small and medium enterprises in the last five months and 3,700 crore was paid to the units in September alone.

The micro, small and medium enterprises (MSME) Ministry this month has written to the top management of over 2,800 corporates by name to make payment of pending dues of MSMEs, an official statement said.

Last month, Ministry of MSME had written to top 500 corporates of India about the pending payments of MSMEs.

The Ministry has said that very good response has been seen from the corporate India. Out of the last five months, the maximum payments to MSMEs have happened in the month of September, 2020. Not only that, in that timeframe, even the procurement and transaction appears to be maximum in the month of September. MSME Ministry has informed that more than Rs. 13400 crore have been paid by Central Public Sector Enterprises (CPSEs) alone in the last five months. Out of this, payments worth Rs. 3700 crore have happened in September only. Ministry has complimented the Corporate sector of the country for this.

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.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
Get alerts on WhatsApp
My ReadsRedeem a Gift CardLogout