Lok Sabha Question No. 1280 (UNSTARRED), answered on 2019-11-25
Subject: MSMEs NPAs
Ministry: FINANCE
Asked by: Anubhav Mohanty

## GOVERNMENT OF INDIA MINISTRY OF FINANCE LOK SABHA

## DEPARTMENT OF EXPENDITURE UNSTARRED LOK SABHA QUESTION NO. 1280

TO BE ANSWERED ON 25 th  November, 2019/ Agrahayana 4, 1941(Saka) 'MSMEs NPAs'

## 1280. Shri Anubhav Mohanti

## Will the Minister of Finance be pleased to state :

- (a) Whether the Government  is aware that the Micro, Small and Medium, Enterprises  (MSMEs)  are  facing  problems  of  delayed  payments  by  large corporations  which  is  creating  a  fear  of  rising  Non-Performing  Assets  (NPAs) among MSMEs despite having laws such as MSME Development Act, 2006 and MSME Samadhaan Portal;
- (b) if  so,  the  measures  that  the  Government  propose  to  take  to  ensure  timely payments  to  MSMEs  so  that  the  fear  of  getting  converted  into  an  NPA  is completely removed and if so, the details thereof along with the time by which it is likely to be implemented;
- (c) Whether  the  Government  will  consider  integrating  all  relevant  schemes  under one single authority as the current schemes have overlapping objectives leading to confusion among beneficiaries and implementing agencies besides increasing administrative costs; and
- (d)   if so, the details thereof and if not, the reasons therefor?

## ANSWER THE MINISTER OF STATE FOR FINANCE (SHRI ANURAG SINGH THAKUR)

(a),  (b),  (c)  &  (d)  :    Government  is  aware  that  Micro,  Small  and  Medium,  Enterprises (MSMEs)  are facing challenges in getting due payments on time from large corporations.  In  order  to  ensure  timely  payments  and  to  prevent  their  accounts  from being  treated  as  Non  Performing  Assets  (NPAs),  Government  has  taken  following steps:

- (i) Under  the  provisions  of  the  Micro,  Small  and  Medium  Enterprise  Development (MSMED) Act, 2006, 60 Micro & Small Enterprises Facilitation Councils (MSEFCs) have been set up in the States/Union Territories for resolution of delayed payment cases by way of conciliation and/ or arbitration.
- (ii) The  Ministry  of  Micro,  Small  &  Medium  Enterprises  (MSME)  has  launched  the SAMADHAAN portal on the 30.10.2017 to enable Micro & Small Enterprises (MSEs) across  the  country  to  directly  register  their  cases  online  on  the  portal  relating  to delayed  payments  by  Central  Ministries  /  Departments/  Central  Public  Sector Enterprises (CPSEs)/ State Governments etc.
- (iii)   Government  of  India,  vide  Gazette  notification  S.O.  5621(E)  dated  02.11.2018 instructed  that  all  Companies  with  a  turnover  of  more  than  Rs.  500  crore  and  all CPSEs  shall  be  required  to  get  themselves  onboard  on  the  Trade  Receivables Discounting  System  Platform  (TReDS)  in  order  to  address  cash  flow  problems  of MSMEs. Further Government vide Gazette Notification 5622(E) dated 02.11.2018, on delayed  payments,  instructed  that  all  companies  who  got  supplies  of  goods  or services from MSEs and whose payment exceeds 45 days from the date of deemed acceptance of the goods or services as per the provision of the Act, shall submit half yearly return to the Ministry of Corporate Affairs stating the following :-
- i. The amount of payments due; and
- ii. The reason of the delay.
- (iv) MSME-Development Institutes (under the Ministry of MSME) located in the States are helping Committees set up by Banks for restructuring debts of the MSMEs so that their loans are not treated as NPAs, especially when they face such problems related to delayed payments.

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