India Entry & Business Startup Consultings

Government Making Large Firms Disclose MSME dues

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.

 

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