Vivad se Vishwas - I scheme: Govt grants Rs 256 crore in relief to MSMEs

The Ministry of Finance said in a release that this move will increase the flow of bank credit by freeing up guarantees

The finance ministry announced on Tuesday that more than Rs 256 crore in relief grant has been given to Micro, Small and Medium Enterprises (MSMEs) under the Vivad se Vishwas-I scheme for the Covid-19 pandemic period.

The government departments and ministries accepted more than 10,000 claims of MSMEs. The ministry said in a release that this move will increase the flow of bank credit by freeing up guarantees.

The highest relief worth Rs 116.47 crore has been granted by the Ministry of Petroleum and Natural Gas (MoPNG), which includes the claims settled and the amount paid by the agencies under the administrative control of the MoPNG. The Ministry of Railways granted Rs 79.16 crore in relief, while the Ministry of Defence granted Rs 23.45 crore. The Ministry of Steel provided a relief of Rs 14.48 crore, whereas the Ministry of Power gave Rs 6.69 crore in relief.

"The relief provided under this scheme were in continuation to the efforts of the government in promoting and sustaining the MSME sector severely impacted by the Covid-19 pandemic," the ministry said.

Finance Minister Nirmala Sitharaman, in the 2023-24 Budget, announced the Vivad se Vishwas-I scheme, which seeks to provide relief to MSMEs. Under the scheme, in case of failure by MSMEs to execute contracts during the Covid-19 pandemic period, 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by government and government undertakings. The Ministry of Finance launched the scheme through the Government e-Marketplace (GeM) portal on April 17.