Micro and Small Scale Enterprises (MSMEs) face working capital issues due to delay in payments made to them. Keeping this in mind, the Ministry of MSME has demanded that large private companies and PSU’s declare the amount pending with their MSME vendors as well as report the reasons for holding up their dues.
The notification dated 2nd November, clearly states that all payment delays more than 45 days have to be disclosed in the half-yearly report statement. This move is expected to thwart both corporate companies and PSU’s to honour payments in a timely fashion.
The news has received a mixed reaction, while some in the industry welcome the move some expect sterner regulation. In an interview with KNN India, Chandrakant Salunke, Founder and President of SME Chamber of India stated that “Instead of just issuing notification, the government should take legal action against those companies who failed to pay MSMEs. Further, that company should be de-listed from ROC and also asked to pay 50% extra of the amount mentioned in the bill.” He also added that any company that makes the same mistakes for three MSMEs should be delisted.
In a bid to address the same issue, the ministry of MSME had last year launched a portal especially dedicated to reporting cases of delayed payments of bills. The notification hopes to serve as a reminder to the big industry players and PSU’s to honour their payments due to MSMEs. However, the due date and the format of the form are yet to be notified.
