The Government is making it mandatory for large companies to disclose their dues to MSMEs to ensure timely payments. Some of its features are as follows:
- Union MSME Minister Nitin Gadkari said that despite various interventions, including MSME firms that payments will be made by the Central Government & its undertakings within 45 days of delivery of goods or services which is a satisfactory solution to the problem of timely payments to MSMEs.
- MSMEs are the backbone of the Indian economy, contributing a large number of employment, manufacturing & exports. There has been a large impact on such enterprises due to the crisis of COVID-19.
- One attempt to get money back to these MSMEs is that bigger companies make a declaration regarding the payments to MSMEs & make it binding for them.
- The issue of payment to these units is a “very serious” concern & its non-payment leads to working capital becoming scared (limited) for such businesses.
- Partnership with banks is to be considered, wherein a bank pays to the supplier in a specified time & collects interest from the company which has received the goods or services.
- MSME stock exchanges are to be created by the Government, which will have small businesses listed on it. 15% of equity will be provided to those businesses which list on them.
- Investment decisions will be based on the credit rating of a firm, Goods & Services Tax (GST) payments made by the business, its banking transactions, employment potential, exports & production.