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Last updated: 22 Jan, 2019  

Late.Payment.9.Thmb.jpg Delayed payment: A solution coming!

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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 paper only.

I invite your opinions.

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