Lok Sabha Question No. 2889 (UNSTARRED), answered on 2021-08-05
Subject: Timely Payment of Dues
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Kanimozhi Karunanidhi

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK  SABHA UNSTARRED QUESTION NO. 2889 TO BE ANSWERED ON 05.08.2021

## Timely Payment of Dues

## 2889. SHRIMATI KANIMOZHI KARUNANIDHI:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether the Government has taken any steps to ensure that timely payment of dues to the MSMEs from the Government departments and the Central Public Sector Undertakings, if so, the details thereof; and
- (b) whether the Government has formed any institutional mechanisms to deal with disputes arising out of the pending dues to the MSMEs from the Government sector, if so, the details thereof and if not, the reasons therefor?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NARAYAN RANE)

- (a): Yes, Sir, Some of the steps taken by the Government to pay the pending dues to MSMEs are as follows:-
-  Under the provisions of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, Micro & Small Enterprises Facilitation Councils (MSEFCs) have been set up in the States/UTs to deal with cases of delayed  payments  of  the  Micro  and  Small  Enterprises  (MSEs).  Ministry  of MSME has launched SAMADHAAN Portal on 30.10.2017 (http://samadhaan.msme.gov.in/MyMSME/MSEFC/MSEFCWelcomer.aspx.) for monitoring of the outstanding dues to the MSEs from the buyers of goods and services.
-  If a buyer fails to make payment to MSE supplier, there is a provision to pay compound interest on the due amount at three times of the bank rate notified by the Reserve Bank of India as per section 16 of the MSMED Act, 2006.
-  A special sub-portal within SAMADHAAN portal (https://samadhaan.msme.gov.in/)  was  launched  on  14.06.2020.  An  online reporting system was developed for reporting the dues and monthly payments by Ministries of Government of India and CPSEs to the MSMEs.

: 2 :

-  Government of India has also instructed CPSEs and all companies with the turnover of Rs. 500 Crore or more to get themselves on-boarded on the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating the discounting of trade receivables of MSMEs through multiple financiers.
-  Companies  which  get  supplies  of  goods  or  services  from  Micro  &  Small Enterprises and whose payment to Micro and Small Enterprises exceeds 45 days  from  the  date  of  acceptance  or  the  date  of  deemed  acceptance  of  the goods or services, also need to submit a half yearly return to the Ministry of Corporate Affairs stating the amount of payments due and the reasons of the delay.

## (b): Yes, Sir. The details are :

-  MSEFCs have been set up in all States/ UTs to resolve the delayed payments cases by way of conciliation and / or arbitration as per the provisions of the Micro, Small & Medium Enterprises Development Act, 2006.
-  Sub  section  (3)  of  Section  18  of  the  Micro,  Small  and  Medium  Enterprises Development Act, 2006 provides for MSEFCs to take up the references for arbitration in the case of delay in payment to micro or small enterprises from their buyers. Also the MSEFCs may refer the same to any institution or centre providing  alternate  dispute  resolution  services  for  such  arbitration  and  the provisions of the Arbitration and Conciliation Act, 1996 shall then apply to the dispute, as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of section 7 of that Act.

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