{"id":25858,"date":"2021-02-11T11:37:02","date_gmt":"2021-02-11T06:07:02","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=25858"},"modified":"2021-05-11T16:50:35","modified_gmt":"2021-05-11T11:20:35","slug":"post-covid-impact-underlining-the-clearance-of-dues-to-msmes","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/","title":{"rendered":"Post-Covid Impact Underlining the Clearance of Dues to MSMEs"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Recently, honorable Finance Minister Nirmala Sitharaman takes stock of the situation about outstanding payments or Dues to MSMEs , particularly by central government agencies and CPSEs (Central Public Sector Enterprises). The meeting was attended by the top official including <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME<\/strong><\/a> Secretary A.K. Sharma, Secretary of Department of Financial Services Debasish Panda, among others, were present in the meeting.\u00a0<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Dues_Amounting_to_Rs_21000_Crores_has_been_Cleared_Up_till_Now\" >Dues Amounting to Rs 21,000 Crores has been Cleared Up till Now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Government_Confronting_CPSEs_and_Government_Agencies_for_Prompt_Disbursement_of_Dues_for_MSMEs\" >Government Confronting CPSEs and Government Agencies for Prompt Disbursement of Dues for&nbsp;MSMEs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Why_MSMEs_Across_the_Country_Encountering_Receivable_Issues\" >Why MSMEs Across the Country Encountering Receivable Issues?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Impact_of_COVID_19_on_MSMEs_Performance\" >Impact of COVID 19 on MSMEs Performance&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Non-Supportive_Action_of_Bank_making_MSMEs_more_Vulnerable_to_Liquidity_Crunch\" >Non-Supportive Action of Bank making MSMEs more Vulnerable to Liquidity Crunch<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/post-covid-impact-underlining-the-clearance-of-dues-to-msmes\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Dues_Amounting_to_Rs_21000_Crores_has_been_Cleared_Up_till_Now\"><\/span>Dues Amounting to Rs 21,000 Crores has been Cleared Up till Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Since the arrival\nAatmanirbar Bharat package, concerted efforts and regular follow-up has been\nmade by the Indian government for the payment of these dues. Major stress was\nplaced on central government agencies and CPSEs for payment of dues to MSMEs.\nConsequently, over INR 21,000 crore of dues to MSMEs have been cleared in seven\nmonths by CPSEs and central government agencies.<\/p>\n\n\n\n<p>As per MSME Ministry, the highest level of procurement was obtained in October of over INR 5,100 &amp; payment of over INR 4,100. The subsequent month also witnessed the same level of performance as the amount of procurement and payment account for INR 4700 and INR 4000 respectively. Ministry further cited that the efforts made concerning clarification of dues to MSME include several rounds of written correspondence with CPSEs and GOI ministries followed by in-person meetings and persuasions.&nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/new-structure-of-msme-classification\/\">An Outlook on the New Structure of MSME Classification <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Government_Confronting_CPSEs_and_Government_Agencies_for_Prompt_Disbursement_of_Dues_for_MSMEs\"><\/span>Government Confronting CPSEs and Government Agencies for Prompt Disbursement of Dues for&nbsp;MSMEs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The efforts were\nstrongly supported by the Cabinet secretary and PMO who endeavor to confront\nCPSEs and Government agencies to resolve the said matter. A web-based reporting\nsystem was deployed by the MSMEs ministry for CPSEs and central government\nagencies to submit information regarding the transactions, payment, and pending\ndues on the monthly basis.<\/p>\n\n\n\n<p>The report of 7\nmonths reflects that the procurement by CPSEs &amp; central government agencies\nfrom MSMEs is on the rise &amp; has escalated by almost 2.5 times since May\n2020. The dues to MSMEs also witnessed proportional growth. Meanwhile, the\ndependency of payment has reduced to a significant level in terms of percentage\nagainst procurement value. However, reports in December manifest an improved\ntrend in November as per just ten days of reporting, the statement said.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_MSMEs_Across_the_Country_Encountering_Receivable_Issues\"><\/span>Why MSMEs Across the Country Encountering Receivable Issues?&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The MSMEs sector\nhas been distressed by the long-lasting impact COVID 19 pandemic. The sector is\nstill in the recovery phase and it finding it hard to sustain longer owing to\nthe financial crisis. The deficit of cash flow has created a big margin of\nmismatches in the balance sheet, enforcing MSME to cut down their production\nrate to meet the existing liabilities. With dues toward MSMEs has piled up\nevery passing day, the government is making every possible attempt to contained\nthe situation.&nbsp;<\/p>\n\n\n\n<p>Due to consistent endeavor in association with the MSME ministry, the government has successfully recovered Rs 21,000 crore of dues from the central government agencies. The continual effort of the MSME ministry is now paying off as the cash flow for MSMEs has now seemed to shift towards the stabilizing phase.\u00a0 Recent measures taken by the Indian Government to restore the normal cash flow for MSMEs might intensify in upcoming months if the procurement level encounters some dip. These efforts were made to speed up the dues collection process which in turn helps MSMEs to continue their operation and address the existing liabilities with ease.\u00a0 <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_COVID_19_on_MSMEs_Performance\"><\/span>Impact of COVID 19 on MSMEs Performance&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Impact-of-COVID-19-on-MSMEs-Performance.png\" alt=\"Impact of COVID 19 on MSMEs Performance \" class=\"wp-image-25863\" width=\"493\" height=\"278\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Impact-of-COVID-19-on-MSMEs-Performance.png 985w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Impact-of-COVID-19-on-MSMEs-Performance-300x170.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Impact-of-COVID-19-on-MSMEs-Performance-768x434.png 768w\" sizes=\"(max-width: 493px) 100vw, 493px\" \/><\/figure><\/div>\n\n\n\n<p>The announcement\nof a nation-wide lockdown hampered MSME owners, workers, and stakeholders in\nunexpected times, where no one had the clues to counteract such a situation\nowing to lack of experience. The extended lockdown has severely affected the\nsupply of goods, procurement of raw material, and availability of manpower.\nFrom April to June 2020, the sector encountered obstacles related to\nwages\/salaries\/debt repayments, &amp; statutory dues, etc.&nbsp;<\/p>\n\n\n\n<p>According to the\nsurvey report, the earning of MSMEs was reduced by 20-50% due to the\ndisruptions triggered by the Covid-19 outbreak. Companies dealing with the\nproduction of essential commodities were better off in terms of cash flows.\nMany companies laid-off their manpower because of inability to pay salaries,\nvacated workplaces due to escalating expenses &amp; stopped production owing to\nlack of demand.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Non-Supportive_Action_of_Bank_making_MSMEs_more_Vulnerable_to_Liquidity_Crunch\"><\/span>Non-Supportive Action of Bank making MSMEs more Vulnerable to Liquidity Crunch<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Uncertainty in\nfuture trade is making financial institutions reluctant to extend any new\nfiscal lending or protect potential risk. And in the light of the fact that\ndues for MSMEs were piling up gradually, banks may no longer remain supportive\nas they were in the post-pandemic phase.&nbsp;<\/p>\n\n\n\n<p>This all-around\nambiguity required a push by the Indian government to boost market confidence\nand stabilizing regular cash flow. The economic slowdown has dragged us to pay\nattention to self-sustainable values, the Swadeshi dream.&nbsp;<\/p>\n\n\n\n<p>The Atmanirbhar\nBharat Mission was rolled out to encounter two burning issues collectively; one\nbeing a boost to MSMEs and the other reducing the dependency on overseas\ncountries<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <strong><em>government of India<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Government_of_India\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> is already aware of the deteriorating situation of MSME and is continually striving to counter that loss by implementing relevant measures. The disruption of the cash flow for MSMEs created due to the non-payment is certainly a major issue that seeks expeditious solutions. GOI in association with respective authorities has taken some proactive measures for prompt clarification of dues to MSMEs. Approaching the bigger organization individually and insisting them to release the payment towards MSMEs is a part of their strategy to speed up the dues collection process.&nbsp; <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/msme-samadhaan-to-recover-unsettled-debt\/\">An Overview on MSME Samadhaan to Recover Unsettled Debt <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, honorable Finance Minister Nirmala Sitharaman takes stock of the situation about outstanding payments or Dues to MSMEs , particularly by central government agencies and CPSEs (Central Public Sector Enterprises). The meeting was attended by the top official including MSME Secretary A.K. Sharma, Secretary of Department of Financial Services Debasish Panda, among others, were present [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":25859,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1523],"acf":{"service_id":"71"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":2842,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25858"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=25858"}],"version-history":[{"count":12,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25858\/revisions"}],"predecessor-version":[{"id":30124,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/25858\/revisions\/30124"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/25859"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=25858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=25858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=25858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}