Govt keen on timely payments to MSMEs

The Union government is considering a new set of measures—including charging interest and imposing a substantial levy on defaulters—to address the longstanding issue of delayed payments to micro, small, and medium enterprises (MSMEs), said two people close to the matter.

- Rituraj Baruah & Subhash Narayan

As a regulatory measure, the Centre is considering introducing mandatory ageing analysis reporting in corporate filings.

(HT)

The MSME and finance ministries are discussing amendments to the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, to enforce automatic interest accrual after payments remain overdue beyond the 45-day period, as verified through the UDYAM portal, unless the contract specifies a longer period, one of the two people said.

"Another proposal is to penalize noncompliance with a levy amounting to 2% of large buyers' turnovers," the person added.

Currently, the penalty and interest accrual only come into effect after an MSME files a complaint about the payment delay.