Increase in Procurements and Payments to MSMEs

The Micro, Small and Medium Enterprises (MSMEs) have witnessed upto 2.5 times increase in the total procurements and transitions in October of Rs 5,000 crore compared to Rs 2,300 crore in May. The payments to MSMEs see a similar proportionate increase to approximately 80% in October from around 76% in May. In the last six months, the procurements and payments by CPSEs to MSMEs have gone up phenomenally.  

With the monthly rise in procurements and payments, there is also a fall in the ratio of pendency of payments to MSMEs. As the statistics reveal, within the 45-day window, the pending payments to MSMEs are one-fifth against the procurements. According to The Indian Express reports, the pending dues to MSMEs were Rs. 561.64 crore in May which shelved upto Rs. 969.19 crore in July and continued to be raised with Rs. 830.36 crores in August.  

To elucidate this matter, the Ministry said that the total dues at the end of a month “have to be seen against total procurement and transactions at the end of the same month and the payments made”. The monthly pendency of payments have come down from 24% to 20% in the six months from May to October. 

The Government took another step of asking to clear the dues through the means of letters to 500 private companies in September and to 2800 corporates in October. As a result of which most corporations paid their dues to MSMEs before the festivals. The outcome of which is the highest procurement, enormous transactions, and greatest payments to MSMEs by the CPSEs. 

The MSME Ministry’s Samadhaan portal only accounts for a part of the total dues to units. Along with the dues reflected on the portal, the below mentioned entities too owe to MSMEs:

• Corporate sector,
• States, and
• State government enterprises. 

This improvement in the figures is a result of the efforts and campaigns by the MSME Ministry and the proactive policies, timely interventions and constant support of the Government of India.