Lok Sabha Question No. 2328 (UNSTARRED), answered on 2023-08-03
Subject: MSME Samadhaan
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Heena Vijaykumar Gavit, Rita Bahuguna Joshi, Sujay Radhakrishna Vikhepatil, Shrikant Eknath Shinde, Unmesh Bhaiyyasaheb Patil, Krishna Pal Singh Yadav

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

## LOK SABHA UNSTARRED QUESTION NO. 2328 TO BE ANSWERED ON 03.08.2023

## MSME SAMADHAAN

2328:

DR. HEENA VIJAYKUMAR GAVIT:

PROF. RITA BAHUGUNA JOSHI:

DR. SUJAY RADHAKRISHNA VIKHE PATIL:

DR. SHRIKANT EKNATH SHINDE:

SHRI  UNMESH BHAIYYASAHEB PATIL:

DR. KRISHNA PAL SINGH YADAV:

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

(a) whether the Government has considered implementing stricter penalties or deterrent measures to discourage delayed payments to Micro, Small and Medium Enterprises (MSMEs) under MSME Samadhaan initiative;

(b) if so, the steps taken by the Government to ensure effective enforcement of prompt payment norms and protect the interests of MSMEs;

(c) the  details  of  data  or  statistics  regarding  the  number  of  cases  resolved  through  the  MSME Samadhaan initiative, along with the average time taken for resolution;

(d) whether MSMEs Samadhaan initiative promotes transparency and accountability in payment transactions between MSMEs and their buyers and if so, the details thereof; and

(e) the details of the platforms established to monitor and track payment disputes along with the measures taken to ensure fair and impartial resolution of such disputes?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI BHANU PRATAP SINGH VERMA)

(a) & (b): The steps  taken  by  Government  to  prevent  delay  in  payments  to  Micro,  Small  and Medium Enterprises (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 the cases of delayed payments of the Micro and Small Enterprises (MSEs).
-  Ministry of MSME launched a portal viz. Samadhaan Portal (https://samadhaan.msme.gov.in/MyMsme/MSEFC/MSEFC\_Welcome.aspx) for filing of grievances & for monitoring of the outstanding dues to the MSEs from the buyers of goods and services on 30.10.2017.
-  The  Ministry  of  MSME  has  requested  States/UTs  to  set  up  more  number  of  MSEFCs  for quicker disposal of cases related to delayed payments. So far 152 MSEFCs have been set up with  more  than  one  MSEFC  set  up  in  States  like  Delhi,  Jammu  &  Kashmir,  Karnataka, Kerala, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, U.P. & West Bengal.

-  The Ministry of MSME created a special sub-portal within Samadhaan Portal on 14.06.2020, after the AatmaNirbhar Bharat announcements, for reporting the dues and monthly payments by Central Ministries/Department/Public Sector Enterprises to MSMEs.
-  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.
-  Budget  2023  announcement:  Under  Section  43B  of  Income  Tax  Act:  Deduction  has  been allowed  for  expenditure  incurred  on  payments  only  when  payment  is  actually  made  to MSMEs.
- (c): MSEs can file applications in Micro and Small Enterprise Facilitation Councils (MSEFCs) for  delayed  payments.  After  the  application  is  admitted  by  the  MSEFCs,  it  becomes  a  case.  The details of applications/cases filed on Samadhaan Portal from 30.10.2017(launch date) to 31.07.2023 are as follows:-

| Description                                      | No. of applications/cases   | Amount involved (Rs. In Crore)   |
|--------------------------------------------------|-----------------------------|----------------------------------|
| 1. Applications mutually settled                 | 14,508 (9.35%)              | 1,860.6 (5.01%)                  |
| 2. Cases disposed by MSEFCs                      | 30,322 (19.53%)             | 8,878.7 (23.89%)                 |
| 3. Applications rejected by MSEFCs               | 39,409 (25.39%)             | 7,830.52 (21.07%)                |
| 4. Cases currently under consideration by MSEFCs | 32,262 (20.78%)             | 11,392.3 (30.65%)                |
| 5. Applications yet to be viewed by MSEFCs       | 38,739 (24.95%)             | 7,203.7 (19.38%)                 |
| 6. Applications filed by MSEs (1+2+3+4+5)        | 1,55,240 (100.00)           | 37,165.82 (100.00)               |

The time taken to review the applications and decide on the resolution of the dispute varies from case to case and across MSEFCs.

(d) & (e): As per the provisions of MSMED Act 2006, when a buyer does not make payment to the  supplier  (Micro & Small  Enterprises)  for his  supplies  within 45  days  of  the  acceptance  of  the goods/service rendered, then the buyer is liable to pay a compound interest with the monthly rests to the supplier on the amount at the three times of the bank rate notified by RBI.

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