Lok Sabha Question No. 988 (UNSTARRED), answered on 2021-02-08
Subject: Clearance of Dues of MSMEs
Ministry: FINANCE
Asked by: Balashowry Vallabbhaneni

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO-988

ANSWERED ON-08/02/2021

## CLEARANCE OF DUES OF MSMES

## 988. SHRI BALASHOWRY VALLABHANENI

Will the Minister of FINANCE be pleased to state:

- (a) whether  the  Ministry's  directive  of  clearing  the  dues  of  Micro,  Small  and Medium  Enterprises  (MSMEs)  by  the  States,  Centre  and  Corporations  has strictly been adhered to;
- (b) if  not,  the  details  of  dues  pending  for  MSMEs  by  the  States,  Centre  and Corporations;
- (c) whether it has come to the notice of the Ministry that the dues to MSMEs are gradually mounting and as of October, 2020, there are nearly Rs. 1,000 crore dues to MSME sector; and
- (d) if so, the action taken by the Ministry to clear the dues of MSMEs?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ANURAG SINGH THAKUR)

- (a) to (c):           As soon as the Government announced the directive as regards clearing  of  dues  of  the  Micro,  Small  and  Medium  Enterprises  (MSMEs), Ministry of MSME got active to play an important role in clearance of dues to the MSMEs. Government has taken many steps to get the dues payable to the MSMEs cleared by public sector units of State and Central Governments. The Ministry  has  taken  up  the  subject  vigorously  with  the  Central  Ministries, Central  Public  Sector  Enterprises  (CPSEs)  and  State  Governments  and  the Corporate entities.   But, it is to be noted that the Central Government cannot

issue any directions to, or force, State Governments or State PSEs to pay the dues.

- (ii) The status of monthly payments by Central Ministries and CPSEs to MSMEs dues after Atma Nirbhar Bharat package is given below:-

| Reported Month                                      |   Total Dues at beginning of the month (in Rs. Crores) |   Paid during the month (Rs. Crores) |   Pending at the end of month (in Rs.Crores) |
|-----------------------------------------------------|--------------------------------------------------------|--------------------------------------|----------------------------------------------|
| May 2020 (25 Ministries &79 CPSEs Reported)         |                                                2349.53 |                              1787.89 |                                       561.64 |
| June 2020 (25 Ministries &86 CPSEs Reported)        |                                                2553.94 |                              1905.11 |                                       648.83 |
| July 2020 (30 Ministries &108 CPSEs Reported)       |                                                4124.34 |                              3155.16 |                                       969.19 |
| August 2020 (26 Ministries &104 CPSEs Reported)     |                                                3811.13 |                              2954.48 |                                       856.65 |
| September 2020 ( 25 Ministries &105 CPSEs Reported) |                                                4858.18 |                              3814.44 |                                      1043.74 |
| October 2020 (26 Ministries &108 CPSEs Reported )   |                                                5124.13 |                              4102.43 |                                      1021.7  |
| November 2020: (26 Ministries &110 CPSEs Reported)  |                                                5184.92 |                              4279.67 |                                       905.24 |
| December 2020: (26 Ministries &105 CPSEs Reported)  |                                                6499.92 |                              4821.9  |                                      1678.02 |

(d)  Other  steps  taken  by  Government  to  clear  the  dues  of  MSMEs  are  as below:-

-  In order to promote greater discipline and timeliness in payment to vendors, the  government  has  issued  guidelines  that  whenever  a  Consignee  Receipt  and Acceptance Certificate (CRAC) in the Government e- Market place (GeM) is issued by  a  buyer  and  payment  is  not  made  within  10  days  thereafter,  the  buyer organization  is  required  to  pay  penal  interest  @  1%  per  month  for  the  delayed payment beyond the prescribed timeline till the date of such payment.
-  In  order  to  provide  relief  from  the  problem  of  delayed  payment  from  the MSMEs under the 'MSME outreach programme', Ministry of MSME has issued a notification dated 02.11.2018 with the direction that all CPSEs and all companies with  the  turnover  of  Rs.500  Crore  or  more  shall  be  required  to  get  themselves onboarded  on  the  Trade  Receivables  Discounting  System  (TReDS)  platform. TReDS platform provides an option to MSMEs to discount invoices to raise shortterm  credit  from  banks  to  tide  over  delays  in  payments.  SIDBI  on  26.08.2020 informed/announced  about  the  fees  exemption  for  onboarding  of  registration  of MSMEs  on  the  TReDS  till  31.03.2021.  The  Government  of  India  has  also publicized the exemption of fees and charges for registration on TReDS platform to the MSMEs.

| (TReDS Bills Discounted during Covid Period)        | (TReDS Bills Discounted during Covid Period)   | (TReDS Bills Discounted during Covid Period)   |
|-----------------------------------------------------|------------------------------------------------|------------------------------------------------|
| Date                                                | No. of invoices discounted                     | Value of discounted invoices (Rs. in cr.)      |
| December, 2020 (Cumulative)                         | 1201995                                        | 28,119                                         |
| April, 2020 to December, 2020 (during Covid period) | 472035                                         | 10,285                                         |

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