New Delhi: In a bid that can be described as 'personal follow-up', the Ministry of MSME has written to as many as 2800 corporates demanding clearance of pending payments of the MSMEs. "Riding on the excellent outcome of its efforts, the Union Ministry of Micro, Small and Medium Enterprises( MSME) has substantially widened its request to India Inc. for making payments to MSMEs against their dues of goods and services rendered," the Ministry said in a press release issued on Monday. Because of the letters written to 500 corporates in the month of September, the MSMEs received payment of Rs 3700 crore from PSUs only which the highest-ever payout in a month to MSMEs by these Government-owned companies. PSUs have paid a total of Rs 13,400 cr to MSMEs in last five months.
On its part, Ministry of MSME has made relentless efforts including personal follow-ups like writing named letters to the corporates and digital intervention for the purpose of assisting MSMEs of the country to get the release of their dues from various procurers. In its latest communication to the larger corporate community of the Nation, MSME Ministry while underscoring the importance of making such payments now, says that it will facilitate the small enterprises to avail the business opportunity in the coming festival season. "If the cash flows of MSMEs improve, they can make use of the festival season when there is an opportunity to earn by supplying goods and services. In fact, some of the MSMEs look for such a period for their sustenance of whole year" said the Ministry in the press release.
"Timely payment of their receivables not only supports the MSMEs and their dependents in this festive season but will also sustain many of them for a full year. Therefore, the Ministry has requested the corporates to see and make payment as soon as possible, preferably in the present month" it added.
In case the corporates do not clear the payments of the MSMEs in the stipulated time, there are administrative, legal and Fintech based provisions with regard to MSME payments as well. One of them is TReDS. TReDS is a bill discounting mechanism has been started by RBI. It is mandatory for all CPSEs and the companies with turnover of more than Rs. 500 Crore to join this platform. However, many companies are yet to join it or transact on it. Corporates have been requested to check whether their group/company has joined the TReDS platform and is doing transactions.
Also, there is another legal provision under the MSME Development Act, 2006 which mandates to make the payment to MSMEs within 45 days. "Ministry also feels that a small gesture of payment to MSMEs during this period can go a long way and brighten lakhs of homes and crores of faces" the release concluded.
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