Bikky Khosla | 25 Nov, 2019
payment is an old parasitic business practice. While extending
credit to customers is an aid to selling, there is also an inevitable element
of risk involved, and when it comes to Micro, Small and Medium Enterprises
(MSMEs), their cash flow can hardly withstand the burden of late payment. But
late payment has become a way of doing business. Time and again, the government
has come forward with steps to rescue our MSMEs from being hamstrung by undue
delayed payments, but a real solution still seems far off.
The Union Minister of State for Finance
recently said that several measures are being taken in this direction. The SAMADHAAN portal, for example, has been launched to help
MSEs directly register their cases online relating to delayed payments by
Central Ministries/ Departments/ Central Public Sector Enterprises (CPSEs)/
State Governments, etc. According to data being displayed on the portal, till now
29,999 applications have been filed by MSEs, against which only 1,819 cases
have been disposed. This data is not that encouraging.
the RBI introduced an online platform, TReDS, in
March 2014 to facilitate discounting of bills and invoices of MSE suppliers.
Following this, Receivables Exchange of India Ltd (RXIL), the first TReDS
platform, was incorporated in 2016. However, the process, which involves three
parties--MSE suppliers, corporate buyers and financiers-- with the financier requiring
to discount the invoice after the corporate buyer accepts the invoice and bills
uploaded by the MSME supplier, is too cumbersome.
line is that fine-tuning all the measures launched against delayed payments to MSEs
is a must to really help the sector get rid of the burden of
chasing overdue invoices. On part of small businesses, it is advisable that
they follow a smart credit policy--which clearly states all important credit
terms and conditions--to reduce the risk of bad debts and manage the debtors. Industry
associations should also come forward to vigorously put up this issue before
invite your opinions.