Haryana MSMEs face delayed payments despite facilitation cell

Though Haryana has a facilitation council to look into the grievances of micro, small and medium enterprises (MSMEs) relating to delayed payments, this problem persists. Interestingly, delayed payments are made not just by private players, but public sector enterprises as well.

Rajive Chawla, a member of the Haryana SME facilitation cell, acknowledged that many complaints received by the cell were against public sector enterprises.

Many small and medium-sized enterprises in Haryana complain that they have been constantly facing the problem of delayed payments, despite the fact that the MSME Act of 2006 prescribed that customers must make payments to SMEs within a stipulated period.

In accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, payment for goods or services provided by micro or small enterprises must be made within a period of 45 days from the day of acceptance or day of “deemed acceptance” of the goods or services.

If a buyer fails to pay the amount to the supplier within this stipulated period, he becomes liable to pay compound interest on the delayed payment at a rate that is three times the bank rate. The Haryana facilitation cell has been constituted to look into the payment grievances.

A L Aggarwal, general secretary of the Haryana Chamber of Commerce Industry (HCCI), said that the failure to ensure timely payments to MSMEs – particularly at a time of high interest rates – is a serious blow to them.

Chawla said the facilitation cell in Haryana is helping MSMEs redress their problems. This however is a reactive mechanism — the cell can act only when an enterprise approaches it with a complaint of delayed payments.

Many SMEs fail to complain, fearing that their relationship with clients will be hurt. This only compounds the problem of delayed payments. For this reason, says Chawla, the aggrieved enterprise finds itself has taking up the issue with its customers on its own.