Pending Payments of Rs 21,108 cr to MSMEs Pending

Payments totalling Rs 21,108 crore to micro, small and medium enterprises (MSMEs) are pending across 90,000 applications, as per the latest data from the MSME Samadhaan portal.

Already, 40,000 applications, amounting to Rs 13,199 crore, have been converted into cases by the Micro and Small Enterprises Facilitation Council. The MSME Samadhaan portal monitors payments pending to MSMEs by the government, including state governments, statutory bodies, state-run firms and other government entities. The portal allows MSEs to register complaints related to delayed payments.

State government have the higher pending amount of Rs 3,170 crore, followed by central public sector undertakings (Rs 2,191 crore).

The MSME Development Act prescribes a 45-day payment timeline for buyers to make payments if they are buying from the MSMEs. If the buyers fail to pay within 45 days, they are liable to pay interest at three times the prevalent bank rate on the pending amount.

Last year, the government introduced amendments to the Income Tax Act to ensure that the pending amount to MSME becomes ineligible for deduction from the income of the entity.

The move was aimed at those entities, which were buying from these businesses to settle their dues quickly. Because Delayed payments severely affects enterprises’ cash flow, impeding their growth prospects.