Union Finance Minister Nirmala Sitharaman on Tuesday asked big corporate houses to clear dues to micro, small, and medium enterprises (MSMEs) and said that smaller businesses will need equal support from both the government and larger established firms.
“Support to the MSMEs is not just what the government can give. It is certainly largely dependent on that. There are pending payments from central and state governments and central and state-owned entities. But I was surprised to find that considerable due pending payments were also from the big industries,” the Union finance minister said at the Hero Mindmine Summit.
Sitharaman said that while she could push public sector undertakings (PSUs) and departments and can request states, “I can only appeal to the industry. For all the tears that we shed for the MSMEs, can we limit the time by which the MSME get dues?”
According to reports, India’s MSMEs were owed dues worth Rs 10.7 trillion at the end of 2021. The delays in payments are from private customers, government departments, and PSUs. Of this, micro and small enterprises are owed Rs 8.73 trillion, or 80 per cent of the total pending amount. Micro industries are the worst hit with 65.73 per cent of their payments being delayed.
Sitharaman said in the public’s perception, all these dues are from the government, a perception she set out to correct.
The legally recommended period for payment of dues to the MSME sector in India is 45 days. However, in 2020-21 it stood at 195 days for micro industries.
The government has set up a portal, MSME Samadhan, for clearing unpaid federal dues to MSMEs. According to data on that website, Rs 19,499 crore worth of cases have been filed with regards to unpaid dues, and Rs 4,859 crore worth of cases have been dealt with.
Speaking on other issues, Sitharaman reiterated what she said last week, that over the coming years, job creation will be the Modi government’s biggest priority.
“When you’re planning for the Indian economy for the next 25 years, the first real litmus test would be how would it benefit the workforce. People come out of schools and colleges with different sets of skills and all of them need prospects for the future. That is where the next 25 years will be focused on,” she said.