Procurement from and payment to MSMEs on the rise

As part of Prime Minister’s vision the government announced Atma Nirbhar Bharat package in May, 2020, it was also stated that the MSME dues should be paid in 45 days. Since the month of May 2020, regular follow-up and concerted efforts have been made by the MSME Ministry for payment of these dues. Particular focus was placed on Central Public Sector Enterprises (CPSEs) and the Central Government Agencies (CGA) for payment of dues to MSMEs. As a result, over Rs 21,000 crore of MSME dues have been paid in past 7 Months since May 2020 by the CGA and CPSEs. The highest level of procurement was achieved in October of over Rs 5,100 crore and payment of over Rs 4,100 crore. Going by the reports received in first 10 days for November 2020, this level of performance is expected to be surpassed as procurement of about Rs 4,700 crore and payment of about Rs 4,000 crore have already been reported. The seven months (May-November, 2020) report indicates that procurement by CGA and CPSEs from MSMEs is on the rise and in fact, it has gone up by almost 2.5 times since May 2020 and payments to MSMEs have also gone up proportionately.

The support was important particularly in the months of September and October because with these cash flows, the MSMEs supposed to produce goods and services which could be sold during the festival time. MSME Ministry had requested the corporate sector to help the MSMEs during the festival season because the earning during these festivals would sustain many MSMEs for the whole year. This support has also helped many MSMEs and village industries to do better business than even the previous year.


Based on inputs from PIB, New Delhi

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