The MSME Ministry had written to 500 corporates in September last year followed by another 2,800 businesses in October to clear pending MSME dues. (Image: Pixabay)

Credit and Finance for MSMEs: Public sector units (PSUs) and government departments have cleared Rs 50,350 crore in pending payments to MSMEs as of November 25 in the current calendar year, showed an analysis of the latest official data on payments cleared. Since May 2020, when Finance Minister Nirmala Sitharaman had announced Covid relief measures for MSMEs and highlighted in her press conference that MSME receivables from the government and CPSEs will be released in 45 days, total pending dues worth Rs 77,171.82 crore have been cleared as of November 25, 2021. The latest data was shared by MSME Minister Narayan Rane in Parliament during the ongoing winter session.

The amount of dues cleared since May last year progressed from Rs 10,000 crore till around the end of August to Rs 13,400 crore till September, and Rs 26,821 crore till December 2020, based on data shared in statements throughout the period by the Finance ministry and MSME ministry. Since December, the pending dues cleared till November this year were up 2.8X. While data on the total amount due wasn’t available to gauge the current share of dues cleared in the overall amount pending, the total dues for the May-December 2020 period were Rs 34,506.09 crore.

“The jump is more due to the market forces. While buyers have generally been paying for goods purchased after 90 or even 120 days but since the demand has increased significantly for multiple products, they are forced to pay for products instantly. Government is one of the buyers. So, by market forces, buyers are releasing payments on time to get raw materials as the input costs have jumped across categories instead of delaying the payments,” DP Goel, Managing Director, Conquerent Control Systems, and Co-Chairman, MSME Committee, PHD Chamber of Commerce told Financial Express Online.

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The MSME Ministry had written to 500 corporates in September last year followed by another 2,800 of such enterprises in October to clear pending MSME dues in the respective month. The government had also urged buyers to onboard the Trade Receivables Discounting System (TReDS) platform to tide over their delayed payment issue.

Importantly, even as the government has been urging ministries, PSUs, others to clear MSME dues within 45 days, it can’t force them to clear payments. “The Ministry has taken up the subject vigorously with the central ministries, CPSEs, and state governments and the corporate entities. But, it is to be noted that the central government cannot issue any directions to, or force, state governments or state PSEs to pay the dues,” former MoS Finance Anurag Singh Thakur had said in a written reply to a question in Lok Sabha last year.

Meanwhile, as per the data on the MSME Samadhaan portal, the number of delayed payment applications filed by micro and small enterprises (MSE) since the launch of the portal on October 30, 2017, is nearing the 1-lakh mark involving Rs 25,375 crore stuck. So far, 10,433 cases have been disposed by MSE Facilitation Councils while 9,410 applications have been mutually settled between seller and buyer and nearly 20,000 applications have been rejected by councils.