Govt: Share of monthly pending MSME dues gets ‘normal’; drops to 20% in Oct while procurement doubles

Credit and Finance for MSMEs: The quantum of monthly pending dues to MSMEs by the ministries and central public sector enterprises (CPSE) against goods purchased has come down from 23.90 per cent in May 2020 to 20.65 per cent in October, according to the data shared by the MSME Ministry on Tuesday. This reflected the increase in the ratio of monthly payments against the procurement made from 76.10 per cent in May to 79.35 per cent in October. While 25 ministries and 79 CPSEs had bought goods worth Rs 2,346.82 crore in May, the number of buyers also went up to 26 ministries, and 100 CPSEs purchasing Rs 5,096.53 crore products and services from MSMEs in October.

“Pending payments are only to the tune of one fifth against the procurement and are mostly within 45 days; thus, forming part of normal business,” the ministry said in a statement. The Finance Minister had asked the buyers to clear MSME dues within 45 days while announcing the initiatives under the Atmanirabhar Bharat campaign for small businesses. The government had in September as well written to 500 private companies to clear dues followed by letters to 2,800 corporates for the same in October. “As reported by many corporates and as per market feedback, most of the corporates have paid the MSME dues before the festivals. This is also reflected in the highest procurement, biggest transactions, and maximum payments to MSEs by the CPSEs as shown in the table attached.”

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The amount pending for the month of May stood at Rs 560.97 crore while for October Rs 1,052.45 crore amount was pending, according to the data. Meanwhile, the number of delayed payment applications of MSEs disposed by the micro and small enterprise facilitation councils (MSEFC) has jumped 187 per cent in around past 12 months. From 1,528 applications disposed as of October 16, 2019, the number increased to 4,389 as of November 9, 2020, as per the data from the MSME Samadhaan portal. The jump was also with respect to the total number of applications filed by MSEs from 27,380 applications to 59,456 applications during the said period – an increase of 117 per cent.