Finance Minister Nirmala Sitharaman takes stock of MSME dues

Finance Minister Nirmala Sitharaman on Thursday reviewed the situation about outstanding payments to micro, small and medium enterprises, especially by CPSEs and central government agencies.

Top officials, including Secretary in the Department of Financial Services Debasish Panda, MSME Secretary AK Sharma, among others, were present in the meeting.

As part of the Aatmanirbhar Bharat package announced in May this year, MSME dues from central government agencies and Central Public Sector Enterprises (CPSEs) should have been paid in 45 days.

"Since the month of May 2020, regular follow-up and concerted efforts have been made by the Government of India, particularly by the MSME Ministry, for payment of these dues. Particular focus was placed on CPSEs and central government agencies for payment of dues to MSMEs," an official statement said.

As a result, over Rs 21,000 crore of MSME dues have been paid in the past seven months by central government agencies and CPSEs, it added.

The statement by the MSME ministry said the highest level of procurement was achieved in October of over Rs 5,100 crore and payment of over Rs 4,100 crore.

It further said, going by the reports received in the first 10 days of November, this level of performance is expected to be surpassed as procurement of about Rs 4,700 crore and payment of about Rs 4,000 crore have already been reported.

"Efforts made in respect of clearing MSME dues include several rounds of letters written to the GoI Ministries and CPSEs by the Secretary, MSME, followed by personal talks and persuasions," the statement said.

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The efforts found strong support from PMO and Cabinet Secretary, who wrote letters to CPSEs and government agencies.

An online reporting system was developed by the MSME ministry for CPSEs and central government ministries to report details of total transactions, total payment as well as pending dues at the end of every month.

The report of seven months (May-November) indicates that procurement by central government agencies and CPSEs from MSMEs is on the rise and has, in fact, gone up by almost 2.5 times since May 2020. The payments to MSMEs have also gone up proportionately.

Meanwhile, the pendency of payment has gone down in terms of percentage against procurement value.

However, reports in December show a better trend than in November as per just 10 days of reporting, the statement said.