One of the biggest challenges that the Micro, Small and Medium Enterprise (MSME) sector faces relates to delay in payment of supplies made to their large counterparts including Government agencies.
Realizing the criticality of the issue, the first meeting with associations that the new Development Commissioner of MSME Shailesh Kumar Singh has set up is on the issue of delayed payment. The meeting is to be held virtually on 21st February 2022.
The issue reverberated in the Union Budget also as a new e-bill platform is being proposed which all the suppliers and the buying agencies will use to register bills and make payments.
“As a further step to enhance transparency and to reduce delays in payments, a completely paperless, end-to-end online e-Bill System will be launched for use by all central ministries for their procurements. The system will enable the suppliers and contractors to submit online their digitally signed bills and claims and track their status from anywhere,” the Finance minister said in her Budget speech.
Government is also working towards strengthening the three electronic bill discounting platforms- TReDS, set up under aegis of reserve Bank of India.
Besides TReDS there is a an elaborate mechanism for helping Micro and Small enterprises through Facilitation Councils in the States under MSED Act where an aggrieved MSE can file case against delay in payment. The mechanism has mixed success.
MSMEs dither filing cases against their buyers as the act usually spells end of buyer-seller relationship.
Government has been trying various market based mechanisms to address the issue and the meeting is being seen in that context.