Government, financiers, and large enterprises, can solve delayed payments issues together: Report
The report released by the Chief Economic Advisor to the Government of India, V. Anantha Nageswaran, also focuses on creating an additional 10 crore jobs by 2030.
The Global Alliance for Mass Entrepreneurship (GAME) in collaboration with C2FO (Collaborative Cash Flow Optimization), on Thursday, released a report focused on solutions of delayed payments.
The report on delayed payments titled Imagining Solutions to Unlock Working Capital for MSMEs recommends a coordinated effort by the government, financiers, and large enterprises to bring out plausible solutions for delayed payments issues faced by micro-, small-and medium- enterprises (MSMEs), a challenge not only for India but for MSMEs worldwide.
The report released by the Chief Economic Advisor to the Government of India, V. Anantha Nageswaran, also focuses on creating an additional 10 crore jobs by 2030.
The government's strategies and norms for promoting credit flow, enhancing cash flow-based lending by streamlining credit guarantees, and enhancing TReDS by incorporating GST data will all help address the problems, as per the report.
“Hopefully over time, through some of the legislative and budgetary announcements, we can slowly bring about a mindset shift, not just in the private sector, but also in the public sector,” said Nageswaram, commenting on the report.
He also added that after the announcements made in the Union Budget 2023, it is clear that payments to MSME suppliers cannot be claimed on an accrual basis and cannot be set off against taxable income unless the payment is actually made.
“That makes it clear that companies cannot have their cake and eat it too. Without a vibrant MSME sector, we cannot talk of India becoming a global economic power,” he said.
According to GAME founder Ravi Venkatesan, businesses can become more effective and generate more jobs provided they have access to markets, funding, technology, and a competitive strategy.
“Uninterrupted cash flow is a pre-requisite, and GAME's Delayed Payment 2.0 proposes a four-point solution to enable MSMEs to succeed, and the Indian economy continues to expand," he said.
Edited by Akanksha Sarma
