Deferred Payment Report 2.0 by Global Alliance for Mass Entrepreneurship (GAM) and C2FO (Collaborative Cash Flow Optimization, C2FO) titled ‘Imagining Solutions to Unlock Working Capital for MSMEs’ was released today by Chief Economic Adviser to the Government of India, Dr. Released by V Ananth Nageswaran. India’s first solutions-focused report of MSME
Commenting on the report, Chief Economic Adviser to the Government of India Dr. V Ananth Nageswaran said, “I am very happy with the fact that the Global Alliance for Mass Entrepreneurship continues to focus on the issue of delayed payments which needs to be addressed.
This is an issue that can only be resolved over time by maintaining constant pressure. It is also an issue that is yet to be resolved not only in India, but in many countries around the world. In India, the government has been focusing on MSME since 2014. And hopefully over time, through some legislative and budgetary announcements,
We can gradually change the mindset, not only in the private sector, but also in the public sector. And then, mechanisms and artificial interventions will no longer be needed as a prompt payment culture will be embedded as part of normal large enterprise behavior. In the Budget 2023-24,
The government has clarified that payment for MSME suppliers cannot be claimed on accrual basis and cannot be set off against taxable income until the payment is actually made. It makes it clear that companies cannot have their cake and eat it too. Without a vibrant MSME sector, we cannot talk of India becoming a global economic power.”
A newly launched report by the Indian Ministry of Micro, Small & Medium Enterprises (MSME) identified three central pillars to address the financial crisis – government and policy makers, financially viable and financiers, and large enterprises (public sector undertakings). (including Public Sector Undertaking, PSU)) with a focus on plausible solutions, as well as creating an additional 10 crore jobs by 2030.
Extensive discussions by C2FO and Game and Mr. B.B. SVEN and Mr. Ajit Singh, Ministry of Micro, Small & Medium Enterprises (MSME), Mr. Sharad Sharma, Co-Founder, iSPIRIT, Mr. Vivek Malhotra, Chief General Manager, SIDBI ), inputs from Mr. Anil Bharadwaj, Secretary General, FISME, Mr. Adarsh Kumar, Senior Agribusiness Specialist with Food & Agriculture Global Practice, World Bank and Mr. Rajesh Kumar, Managing Director and Chief Executive Officer, TransUnion CIBIL Co-authored the accompanying report.
Ravi Venkatesan, founder of the Global Alliance for Mass Entrepreneurship (GAM), says, “Most of the Ministry of Micro, Small & Medium Enterprises (MSMEs) lack financial support, lack of guidance support to scale businesses and technological obsolescence. are struggling.
They can be efficient and create more jobs if they have markets, finance and technology and strategies to be competitive. Uninterrupted cash flow is a pre-requisite and the game Deferred Payment 2.0 proposes a four-point solution for the Ministry of Micro, Small & Medium Enterprises (MSME) to succeed and expand the Indian economy. continues.”
Alexander Kemper, Founder and CEO, C2FO, pointed out, “Delayed payments and lack of formal credit can adversely affect a nation’s ability to create jobs. While struggling to deal with payment delays , business owners are also under pressure due to long-standing credit assessment criteria and procedures that limit their access to loans.
Through this report, we have suggested solutions that would simplify India’s stack (account aggregator, GST), credit guarantee scheme and create appropriate incentives for buyers and sellers to overcome this critical problem.”
The report serves as evidence that millions of businesses are not part of the formal economy, which is why they never had access to credit. The impact of delayed payments and the lack of formal credit have adversely affected the nation’s potential to create jobs, including the cost of doing business, creating more barriers to doing business. While struggling with payment delays, business owners are also pressured by non-representative and exclusive assessment criteria that limit their access to loans.
The government’s efforts to introduce schemes and norms are expected to encourage credit flow and strengthen cash flow-based credit by simplifying credit guarantees, consolidating GST data and strengthening Trades (TReDS) and reimagining the late payment dispute resolution process.
You can download the full report here: https://massentrepreneurship.org/wp-content/uploads/2023/03/Delayed-Payments-Report-2.0.pdf
