Medium Small and Micro Enterprises (MSMEs) in the State have urged the State and the Union governments to expedite clearance of payments due to them by public sector units and corporations.
Fortunes of the MSMEs hinge on timely payment by bulk buyers, including public sector units and government boards and corporations. But the delay in payments and lockdown have together exacerbated their financial woes and the units are now tethering on the brink of closure.
Though the Centre introduced the Micro, Small, Medium Enterprise Development Act, 2006, so as to bail out ancillary units from such a situation and specified a credit period of only 45 days, the provisions of the Act are never invoked to ensure timely recovery of payments.
Suresh Kumar Jain, secretary, MSME Council, told The Hindu that payments tend to be withheld indefinitely as a result of which many units go bust. The entrepreneurs also hesitate to take legal measures over concerns of cancellation of future orders from these bulk purchasers, said Mr. Jain. There are hardly about 30 to 40 cases filed to initiate recovery, said Mr. Jain.
During the last lockdown, the Centre directed that the pending payments of MSMEs should be cleared by government agencies which helped the units to absorb the economic shock. The MSMEs have sought a similar directive from the government this year as well.
The crisis plaguing the MSMEs in particular and industries in general came up at a virtual meeting conducted by the stakeholders with R. Vinothpriya, Director, MSME, recently. The stakeholders sought a government directive to public sector units to release the payments due to the MSMEs to ensure free flow of working capital.
The MSMEs have also sought the State government’s intervention with the Centre and extend the time for filing GST returns in the absence of which they will face penalty and other legal consequences.
