Bikky Khosla | 22 Jan, 2019
Late payment is a headache to small and medium
enterprises. While majority of SMEs suffer from poor cash flow, still they extend
credit to their clients, in fear of losing business. This has become a way of
doing business. But this sometimes leads to devastating consequences in the
form of delayed payment. The bigger the order, the worse the problem, and
interestingly it is big corporates, as most SMEs point out,
that defer payment to them for months or years.
The government is no less aware of
this menace, and from time to time, they have come out with measures to help SMEs get rid of it. Only a few months ago an online portal called 'MSME
Delayed Payment Portal: MSME Samadhaan' was launched to enable MSEs directly
register their cases relating to delayed payments by government and its
departments. Also, the MSME ministry often claims that the issue has always been on its
radar. But till now no real result has been achieved.
And now the government is contemplating
another measure to check this evil practice. According to a news report,
published by a national daily, the Centre is mandating disclosure for all
companies that have arrears to MSMEs for over 45 days. After this norm comes into
effect, every company with unpaid bills to MSME units will have to make
half-year disclosure with end of the specified period. The government hopes
that this move will exhort both corporate companies and PSUs to
make timely payment to SMEs.
The MSME ministry had issued a notification in this regard
in November last year, and according to the latest media report, now the
Corporate Affairs ministry would notify the new rules over the next few days.
No doubt, this is a welcome step. At a time when bank financing has been hard
to come by, a real solution to the problem of delayed payment would definitely
give our MSMEs a big relief. But it will be interesting to see what the
government does this time to make sure that the new norms do not remain on
I invite your opinions.