MSME Minister Nitin Gadkari has called a meeting of heads of banks, finance ministry officials, and CEOs of various of central PSUs on Thursday to sort out the problem of delayed payments being faced by small and medium enterprises, sources said. MSMEs have been expressing concern over failure of the Micro and Small Enterprise Facilitation Council (MSEFC) in resolving cases of delayed payments within the stipulated 90 days.
"This major issue is on the agenda of the September meeting convened by minister Gadkari," an official said. In addition to representatives of the micro, small and medium enterprises (MSMEs), the meeting will be attended by heads of several banks, finance ministry officials, chief of public sector units, official from UTs and state governments, they added. The meeting may also consider modification of the relevant rules governing the sector for recovery of dues by way of arrears of land revenue. The MSEFCs of Madhya Pradesh, Bihar and Jharkhand have such provisions. It may also be considered to replicate the Tamil Nadu model where the chairman of the state MSEFC uses video conference facility to expeditious settlement of MSME payments. Besides, proposal of setting up of more than one MSEFC in each state is also on the agenda.
The provisions under the MSMED Act are implemented by MSEFC chaired by Director of Industries of the State /UT having administrative control of the MSE units. State Government/UTs are expected to ensure that the MSE Facilitation Council hold meetings regularly and delayed payment cases are decided by the Councils within a period of 90 days. As per the Act, a buyer from MSME is liable to pay compound interest with the monthly installments to the supplier on the amount at the three times of the bank rate notified by RBI in case he does not make payment within 45 days.