Encouraged by the strong response from the top 500 companies to its earlier entreaty to clear dues of MSMEs, the Ministry of Micro, Small and Medium Enterprises has now cast a substantially wider net. The Ministry has written to the top management of over 2,800 corporates by name, asking them to clear the pending dues of MSMEs by the end of this month.
Payments pour in
“In September, the Ministry had written to the top 500 corporates about the pending payments of MSMEs… A very good response has been seen from corporate India. Over the last five months, the maximum payments to MSMEs happened in September,” said an official statement. Over ₹13,400 crore has been paid by Central Public Sector Enterprises (CPSEs) alone to MSMEs in the last five months, of which ₹3,700 crore was cleared in September alone, said the Ministry.
Timely clearance of receivables will help MSMEs better leverage the festival season, it added. “Timely payment of their receivables at this time will not only support MSMEs and their dependants in this festival season but will also sustain many of them for a full year. Therefore, the Ministry has requested the corporates to make payment as soon as possible, preferably in the present month,” said the statement.
Legal, fintech provisions
The MSME Ministry has also drawn the attention of Corporate India towards key administrative, legal and fintech-based provisions with regard to MSME payments.
“It is ideal that payments are made in the stipulated time. However, to solve the cash flow problems of MSMEs in the absence of that, a bill discounting mechanism has been started by the RBI, called Trade Receivables Discounting System (TReDS). It is mandatory for all CPSEs and companies with a turnover of more than ₹500 crore to join this platform,” the statement added.
The Ministry has also asked India Inc to give details about dues to MSMEs while filing half-yearly returns with the Ministry of Corporate Affairs.