(MENAFN- KNN India) MSMEs approach the Prime Minister for monitoring timely payment of supplies
New Delhi, Jan 19 (KNN) MSME fraternity led by FISME, the apex federation, have requested the Prime Minister's Office to ensure timely payment to MSMEs for sheer survival.
One of the biggest problems faced by MSMEs which affect their operations and profitability is inordinate delays they experience in realising their dues. And surprisingly, some of the blue chip Companies and ‘peoples' own' PSUs are the biggest offenders.
MSMEs have asked the Government for establishment of a Standing Committee to Ensure Timely Payment of MSME dues.
The high-level Standing Committee may be constituted in Ministry of Finance with members also from other Ministries such as from MSME, Corporate Affairs, Commerce and Industry, Defence, Railways, Surface Transport, Civil Aviation and departments such as CBDT/ CBSE and industry bodies of large and small as well as from ICAI.
The fate of Indian MSMEs may have been best summed up by the first book launched by PM Modi after assuming office, 'Indian small and medium enterprises (SMEs) do not receive money owed to them from their larger buyers, a far cry from the nurturing such companies enjoy in Japan and South Korea.
The book co-authored by Dr. Bibek Debroy, Member, NITI Aayog, also mentions, that if Indian SMEs received their payments on time, their profitability could go up by 25 percent.
While the Government is seized to the issue of delayed payment for quite sometime and enacted laws, the feedbacks are simply dismal.
The MSMED Act provides for a mechanism for quasi-judicial Facilitation Councils (FCs) for resolution of cases where payment due to an MSME is delayed beyond 90 days.
However, the awards of these FCs are hoodwinked by the defaulting corporates through long drawn court cases. As a result the MSMEs prefer to better pray and wait rather than approach theses FCs.
The indictment by the Government of the defaulters through various penal tax and ‘declaration' tools also did not deter the large buyers from withholding genuine dues of MSMEs, may be worth of billions.
Now the RBI has also been trying to develop a market based mechanism through which MSME could raise money on the unpaid invoices through an exchange, but here also the corporates first must register and declare their outstandings.
Apprehending the attitude of the corporates to do business on MSMEs' money, FISME has requested the Government to compel the buyers to compulsorily upload their outstanding Bills on the RBI portal and vouch for their payment in due course.
To monitor the status of delayed payment and take prompt measures, FISME has suggested constitution of the high power committee. The purpose of the Committee would not be to look into the individual complaints but to ensure and improve compliance of existing Government initiative. (KNN/DB)
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