Nitin Gadkari: MSME sector on verge of collapse, battle for survival

Nitin Gadkari has urged major industries to release the outstanding dues of MSMEs within a month.

MSME coronavirus

According to reports, the union minister for MSMEs, Nitin Gadkari has said that the micro, small and medium enterprises (MSME) sector is on the verge of collapse and has urged major industries to release the outstanding dues to such companies within a month.

The union minister quoted that the position of MSMEs is worst as they are now engaged in a battle for their survival.

Nitin Gadkari also noted that the pendency of dues owed to MSME units by the central government, state governments, public sector undertakings and major industries is very high.

The MSME minister in an interaction via video-conference with the members of SIAM Institute request all members of major industries to at any cost release the payment within a month as it is on the verge of collapse. The minister quoted, ‘now it is a very important thing if you can help them, within a month if you can give their payment it will be good.’

In the video conference, the minister also said that he was trying to introduce a scheme envisaging setting up of a rolling fund where the interest cost on the payments due to MSMEs shall be borne either by the supplier or the purchasing industry which would help MSMEs to get their working capital.

In fact, the minister had last month said that the government will set up a Rs 1 lakh crore fund to repay outstanding payments to MSMEs owed by the central and state government undertakings as well as major industries.

The union minister had quoted, “we have decided to set up a fund of Rs 1 lakh crore. We will ensure this fund with the government paying the premium. We will come up with a formula for sharing of the interest burden between the paying entity and payment-receiving entity and banks against this fund, for the payments due to MSMEs which are stuck with the PSUs, centre and state governments and major industries.”

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