Industry requires a Uniform Model of operation by Micro & Small Enterprises Facilitation Councils (MSEFC)

No. PR- 203

January 25, 2021

New Delhi

 

Industry requires a Uniform Model of operation by Micro & Small Enterprises Facilitation Councils (MSEFC)

PHD Chamber of Commerce and Industry organised a “Webinar on Issues in Delayed Payments to Micro and Small Enterprises under Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 to understand various legal provisions available in the Act and ways to recover outstanding dues from buyers of MSMEs. Sh. Shantanu Mitra, Additional Development Commissioner, Office of Development Commissioner (MSME), Ministry of Micro, Small & Medium Enterprises, Government of India Ministry of MSME was the Chief Guest on the occasion.

The Introductory remarks were given by Dr H P Kumar, Former Chairman NSIC & Advisor MSME, PHDCCI who set the context and moderated the session .In his remarks he apprised about various provisions made in MSMED Act for dealing with the problem of delayed payments and suggested that large corporates make a ‘prompt payment pledge', and prior commitment to pay their MSE suppliers in accordance with the Micro, Small and Medium Enterprises Development Act, 2006.

Mr Mohit Jain, Chairman, MSME Committee, PHDCCI in his welcome address lauded the resilience of MSMEs which have been contributing to the National economy in spite of facing the problem of delayed realization of their bills and receivables particularly from their large corporate buyers and government organizations for a long time. He mentioned that as a result of these delays, MSMEs face financial hardships and liquidity constraints which lead to severe pressure on their working capital management and many of them turn into ‘Non Performing Assets’ (NPAs).

Mr Anil Khaitan, Former President PHDCCI and Mentor, PHD-MSME Mentoring and Guidance Centre, giving the Industry Perspective about the problem of delayed payments, said the “The Micro Small and Medium Enterprises Development Act 2006” had made ample provisions to mitigate the problem of delayed payment. The act provides that wherever any buyer fails to make payment of its amount to the MSEs as per agreed terms or maximum within 45 days, he would be liable to pay monthly compounded interest at the rate of three times of the Bank Rate notified by the Reserve Bank of India. He further mentioned that since MSMEs are the backbone of the country, they play a very important role in the economy. He suggested the innovative methods for realisation of payments by MSMEs like TReDS and KredX platforms which are digital means to help MSMEs to get their payments from PSUs and corporates. 

Mr Shantanu Mitra, Additional Development Commissioner, Office of Development Commissioner (MSME), Ministry of Micro, Small & Medium Enterprises, Government of India, said the Government has also launched an online delayed payment monitoring system called the MSME Samadhaan which also helps in ease of filing an application to the MSEFC. Any MSME, having a valid Udyog/Udyam Aadhaar Memorandum (UAM) can make an application via this portal. He further suggested that in order to bring uniformity in the functioning of MSE Facilitation Councils, PHD Chamber could provide a model draft of Rules for the use of MSEFCs of all States for consideration of the Ministry.

Mr Vinay Kumar Jain, MSME Recovery Expert and Founder, Lex Process apprised the participants about various legal provisions available in the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006. He said MSMEs can recover their pending dues in three ways MSMED Act, 2006, MSME Samadhan Scheme and Insolvency and Bankruptcy Code, 2016. He made a detailed presentation on the issue of Delayed Payment problem of MSMEs and addressed to various queries of the participants in this regard.

Mr D P Goel, Co Chair, MSME Committee delivered a formal vote of thanks to all the esteemed participants. The Webinar was attended by senior members of PHD Chamber and over 100 attendance from various MSME’s across multiple sectors.

Ends

Media Division

PHD Chamber of Commerce and Industry