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CII poll finds Rs 1,819 cr of unpaid dues to MSME members

Business Finance

Press Trust of India  |  New Delhi 

ACII poll showeddelayed payments of Rs 1,819 crore toabout 450 of its MSME member companies, the industry body said on Monday.

Public sector or government departments including state departments owe MSMEsRs 1,709 crore and the private sector also owes about Rs 110 crore to MSMEs, the quick survey revealed.

The sample CII poll showed that about 32 per cent of the outstanding to MSMEs have been delayed for more than 2 years and about Rs 895 crore are stuck in disputes. These need to be resolved soon to save the MSMEs from solvency, CII Director General Chandrajit Banerjee said.

Of the delayed payments amount, manufacturing contracts account for Rs153 crore, services contracts account for Rs 723 crore and multiple sectors account for Rs 930 crore.

The CII suggested measures to alleviate the issue of pending payments to micro, small and medium enterprises (MSMEs) including tax refunds and incentives.

It said the government should monitor payment delays by CPSUs to MSMEs closelythrough a portal for complaints and ensure necessary funds are provided and utilised for this purpose.

Moreover, all PSUs and government departments both at the central and state-government levels must be encouraged or mandated to register themselves onTReDS platform.

TReDS is an institutional mechanism set up in order to facilitate the trade receivable financing of MSMEs from corporate buyers through multiple financiers.

In addition to overcome the delays in payments to MSMEs due to disputesall pending GST refunds should be cleared immediately, the chamber recommended.

It said all incentives due to MSMEs under various central and state schemes should be released immediately.

Banks should provide additional reconstruction term loans to MSMEsimpacted by the lockdown, with the Government of India offering a guarantee up to 20per cent of the default, CII said.

Finance Minister Nirmala Sitharaman on May 13 had announced that CPSEs and the government would clear payments of MSMEs in 45 days to improve their liquidity.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, May 18 2020. 16:46 IST