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Anil Sasi
The | New Delhi |
Updated: May 15, 2020 7:05:03 am
MSMEs, which represent around 45 percent of the country’s total manufacturing production, 40 percent of exports, almost 30 percent of national GDP, and operate throughout the value chain.
the first tranche of the Center’s aid package may have been directed to the country micro, small and medium enterprises (mipymes)But much of the anguish related to working capital faced by these units goes back to an important source: the government machinery. The total outstanding payments to units in the MSMEs sectorAs at March 31, 2020, it was set at more than Rs 4.95 lakh crore, according to government estimates accessed by The Indian Express.
Sources indicated that more than half of this amount can be attributed to outstanding payments from central government ministries and departments, state governments, and public sector units under the Center and state governments. On Wednesday, announcing the Rs 3-lakh-crore credit guarantee for MSMEs, Finance Minister Nirmala Sitharaman said the Center and central UPMs would remove outstanding MSME fees in 45 days.
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The only official estimate available is on the MSME Samadhaan website, an online late payment monitoring system for settling disputes over late payment submission by affected MSMEs, which has listed the Requests for payment of Rs 40,720 crore on May 14, a fraction of the total installments
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Of this, 11.6 percent or Rs 4,738 crore are claims for quotas from the central government. The total number of mutually settled applications was 3,524, with the amount settled at Rs 288.54 crore, as on Thursday. However, this does not reflect actual government fees due to reluctance among MSME unit owners to discuss pending payments with the government, as this may have a negative impact on new order flows.
“Exact data (on MSME fees) is not available. (The data) comes from state governments and major industries and other agencies … It will be more than Rs 5 lakh crore, “Minister of MSMEs and road and highway transport Nitin Gadkari said in an interview on CNBC TV18 on Thursday.
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Industry estimates are even higher. “Many central, state governments, PSUs, corporations owe almost Rs 5.5 lakh crore to MSMEs and almost 30 percent is due in 120 days, 45 percent is between 60 and 120 days and rests below 60 days. We request the Finance Minister to consider paying the quotas with interest to apply pressure to pay as soon as possible, ”said KE Raghunathan, former National President of the All India Manufacturers Organization.
In September of last year, the then Secretary of Expenditures G C Murmu had said that of the outstanding undisputed MSME assessed contributions of Rs 60,000 crore, the payment of Rs 40,000 crore had been settled.
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MSMEs, which represent around 45 percent of the country’s total manufacturing production, 40 percent of exports, almost 30 percent of national GDP, and operate throughout the value chain. They employ approximately 11 million people, are stressed due to the depletion of internal reserves and the low visibility of demand.
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