Modi govt lists steps to ensure timely payment to MSMEs

A ruling by the ministry of corporate affairs has dealt a body blow on startups looking to raise funds using fintech platforms.

The Narendra Modi government has taken several steps to ensure timely payment of dues to Micro, Small and Medium, Enterprises by large corporates. These steps are taken to prevent MSME accounts from becoming non-performing assets, the Lok Sabha was informed. The government has set up 60 micro and small enterprises facilitation councils across the country to resolve cases of delayed payment through conciliation and arbitration, minister of state for finance Anurag Thakur informed the House in a written reply to a question. These councils have been set up under the Micro, Small and Medium Enterprise Development Act, 2006.

The MSME ministry has launched a web portal for small businesses across the country to register complaints relating to delayed payments. The Samadhaan portal deals with delayed payments by Union and state governments as well as central public sector units.

The government has also notified that all companies with a turnover of more than Rs 500 crore and all central PSUs are required to register on the Trade Receivables Discounting System Platform (TReDS) to address cash flow issues of MSMEs. The government has instructed all the companies that procure goods and services from MSMEs and have a payment pendency exceeding 45 days to file returns every six months showing the amount due and the reasons for delay.

MSME-Development Institutes in states are helping committees instituted by banks for debt restructuring of MSMEs so that their loans are not treated as non-performing assets when they face delayed payments.

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