Centre asks 500 big firms to clear MSME dues fast; govt pays up Rs 10,000 crore

In e-letters sent out to top bosses of the big companies, the Ministry of MSME headed by Nitin Gadkari has said that payment of past dues is very important for MSMEs' survival

KEY HIGHLIGHTS

• Ministry of MSME has written to top bosses of 500 corporates to clear dues of vendors and suppliers on priority

• In e-letters sent out to the chiefs of the big companies, the Ministry headed by Nitin Gadkari has said that payment of past dues is very important for MSMEs' survival

• Enterprises with over Rs 500 crore turnover have been asked to join TReDS platform to improve cash flow to MSMEs

• Ministries and CPSEs have cleared Rs 10,000 crore to MSMEs in recent months

• Ministry of MSME has reminded corporates of the legal provisions under the MSME Development Act, 2006 which mandate that the payment of MSME receivables are made within 45 days

Citing legal provisions under MSMED Act, 2006, the Ministry of Micro, Small and Medium Enterprises (MSMEs) has asked top 500 corporates to clear dues of cash-starved small firms and vendors. In e-letters sent out to top bosses of the big companies, the Ministry headed by Nitin Gadkari has said that payment of past dues is very important for MSMEs' survival. It has advised them to release the payment at the earliest.

Ministry has also reminded the corporates that it has been made mandatory for the corporate entities to file half-yearly returns with the Ministry of Corporate Affairs on their dues to MSMEs. "While appealing to the corporate India for their good gesture towards smaller units, Ministry of MSME has also reminded them of the legal provisions under the MSME Development Act, 2006 which mandate that the payment of MSME receivables are made within 45 days," an official statement said.

It further said that timely payments to MSMEs would be a great contribution to the economy of the nation as it will bring smile on millions of faces whose only source of livelihood is the enterprises in the MSME sector. The directive has come close on the heels of central government asking all the PSUs to clears the dues of their suppliers and vendors.

In addition to writing to CMDs of the public sector entities and following up with them, the MSME Ministry has also devised an online system for reporting. Hundreds of CPSEs have been reporting on this system about the monthly dues and payments since last four months.

"Around Rs 10,000 crore have been reported to have been paid by the Ministries and CPSEs. Similarly, Ministry has also taken up the issue with States and motivated them to monitor and see that such payments are made expeditiously," the MSME Ministry said. Towards another solution of the issue of cash flows of MSMEs, it has been emphasised that all CPSEs and corporate entities with more than Rs 500 crore turnover come on board the TReDS platforms.

However, many corporates are yet to join it or transact thereon. They have been requested to join the TReDS and start transacting.