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The minister also noted that the slope of quotas owed to MSMEs units by the central government, state governments, public sector companies and major industries was “very high”.
“My request to all of you, as members of the main industries, if it is possible for you to release the payment at any cost within a month. Do not take more time than that, otherwise the situation is very bad,” said the minister of MSMEs. He said in an interaction via videoconference with the members of the SIAM Institute.
“But still, if you have a problem somewhere, be positive about this sector, because this is really on the verge of collapse. Now it is very important if you can help them, in a month if you can give them the payment. It will be good “said Gadkari.
The minister said he was trying to introduce a scheme that provides for the creation of a “mobile fund” where the cost of interest on payments due to MSMEs will be borne by the supplier or the purchasing industry.
Gadkari said that the “mobile fund will be useful for MSMEs to obtain their working capital.”
Last month, the minister had said that the government will establish a rupee fund of 1 lakh rupees to pay outstanding payments to MSMEs owed by state and central government companies as well as major industries.
Gadkari had said he had devised a plan to establish the fund, and the proposal could be presented to Cabinet for approval once the finance ministry gives its go-ahead.
“We have decided to establish a fund of Rs 1 lakh crore. We will insure this fund with the government paying the premium. We will develop a formula to share the interest burden between the paying entity and the entity receiving payment and banks against this fund, for payments due to MSMEs that are trapped with UPMs, central and state governments and major industries, “said Gadkari.
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