Finance Ministry issues directives to CPSEs to clear MSME dues
The Union Ministry of Finance has advised administrative ministries for issuing directions to their respective CPSEs to clear pending dues of MSMEs. Last week, Sitharaman had said pending dues of MSMEs would be cleared in 45 days to increase liquidity.
During the year 2019-20, annual procurement of 121 CPSEs was Rs 1,23,494.21 crore, of which Rs 36,703.14 crore of procurement was done from MSMEs i.e. 29.72 percent of the total procurement, the Office of Finance Minister Nirmala Sitharaman said in a tweet.
"As on May 13, 2020, the pending payment of MSMEs by CPSEs is amounting to Rs 1,264 crore i.e. 3.44 percent of total procurement from MSMEs. All the concerned Administrative Ministries of the CPSEs have again been advised on May 20 to direct their respective CPSEs to release the pending payments to MSMEs immediately in line with the government announcement made recently," it tweeted.
Last week, Finance Minister Nirmala Sithraman rolled out a slew of initiatives for micro, small and medium enterprises (MSMEs), following Prime Minister Narendra Modi's narrative of 'atmanirbhar' India which called for boosting of manufacturing of products in the country.
A Rs 20 lakh crore economic stimulus package was announced by the Finance Minister, including a Rs 3 lakh crore collateral-free loan and revision of the definition of MSMEs. Sitharaman also announced that the measures are based on land, labour, liquidity, and law, which will further focus on the ease of doing business, compliance of law and order, and also tackle liquidity concerns, especially among the small businesses.
The ministry also changed the definitions for MSMEs. As per the revised definition, any firm with investment up to Rs 1 crore and turnover under Rs 5 crore will be classified as "micro". A company with investment up to Rs 10 crore and turnover up to Rs 50 crore will be classified as "small" and a firm with investment up to Rs 20 crore and turnover under Rs 100 crore will be classified as "medium".
(Disclaimer: Additional inputs have been included from PTI)