Lok Sabha Question No. 1859 (UNSTARRED), answered on 2025-07-31
Subject: Challenges faced by MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Rajesh Naranbhai Chudasama

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

## LOK SABHA UNSTARRED QUESTION NO. 1859 TO BE ANSWERED ON: 31.07.2025

## CHALLENGES FACED BY MSMEs

## 1859.   SHRI RAJESH NARANBHAI CHUDASAMA:

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

- (a) whether in  today's  competitive  market,  the  exploitation  by  larger  firms  is  a  significant  issue for smaller entities which also affects the Micro, Small and Medium Enterprises (MSMEs) sector, if so, the various measures and initiatives implemented by the Government to tackle this problem; and
- (b) the steps taken by the  Government for the  MSMEs  which  are experiencing issues involving financial difficulties, outdated equipment and technologies that make them uncompetitive against imports and in issue of foreign export markets?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

(a): One of the challenges faced by Micro and Small Enterprises (MSEs) is the delay in payment by buyers. A number of measures and initiatives have been taken by Government to address this issue:

- (i)   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  to  Micro  and  Small  Enterprises (MSEs).
- (ii) SAMADHAAN  Portal was launched on 30.10.2017 (http://samadhaan.msme.gov.in/ MyMSME/MSEFC/  MSEFCWelcomer.aspx.)  for  monitoring  of  outstanding  dues  to  the MSEs from the buyers of goods and services.
- (iii)  A  special  sub-portal  was  created  within  SAMADHAAN  Portal  on  14.06.2020,  after  the Aatma  Nirbhar  Bharat  announcements,  for  reporting  the  dues  and  monthly  payments  by Central Ministries/Department/Public Sector Enterprises to MSMEs.
- (iv) 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, 161 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, Uttar Pradesh and West Bengal.
- (v)  To  enhance  access  to  credit  for  MSMEs  through  digital  platforms  and  other  innovative mechanisms for facilitating MSMEs, Trade Receivables e Discounting System (TReDS), an electronic  platform,  facilitates  the  discounting  of  trade  receivables  of  MSMEs  through multiple financiers. To unlock their working capital by converting their trade receivables into cash the Government of India has announced to reduce the turnover threshold of buyers for mandatory onboarding on the TReDS platform from Rs. 500 crore to Rs. 250 crore.

- (vi)  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  returns  to Ministry  of  Corporate  Affairs  stating  the  amount  of  payments  due  and  the  reasons  of  the delay.

(b): A  number  of  steps  have  been  taken  by  Government  for  the  MSMEs  with  respect  to  the financial difficulties faced by the MSMEs.

- i).   Under Prime Minister's Employment Generation Programme, credit linked subsidy for setting up new Micro-Enterprise in non-farm sector is provided ranging from 15% to 35% of project cost.
- ii).   Rs. 50,000 crore equity infusion through Self Reliant India (SRI) Fund, which has a provision of Rs.10,000 crore from Government of India and Rs. 40,000 crore through Private Equity / Venture Capital funds.  This Scheme is aimed at providing growth capital to the deserving and eligible units of MSME sector.
- iii).  Under  Credit  Guarantee  Scheme  for  Micro  and  Small  Enterprises,  guarantee  coverage  is provided to Banks/Financial Institutions, for loans up to Rs. 10 crore, extended by them to Micro  and  Small  Enterprises,  without  collateral  security  and  third  party  guarantee,  with  a guarantee coverage upto 90 % for various categories of loan.

Further, the Ministry of MSME, in order to help the MSMEs to grow technologically and to enhance their competitiveness, has established Technology Centres (TCs) and Extension Centres (ECs) across  the  country.  These  TCs/ECs  provide  various  services  like  technology  support,  skilling, incubation and consultancy to MSMEs and skill seeker, which makes them capable to deal with the issue of import and foreign export markets.

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