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What is the story about?
Delayed payments to Micro, Small, and Medium Enterprises (MSMEs) in India have decreased to ₹7.34 lakh crore as of March 2024, down from ₹10.7 lakh crore in 2022, according to the Delayed Payments 3.0 report by the Global Alliance for Mass Entrepreneurship (GAME), Federation of Indian Micro and Small & Medium Enterprises (FISME), and C2FO.
The third edition of the report highlights that while policy interventions have reduced the quantum of overdue payments, these remain equivalent to over 4.6% of India’s Gross Value Added (GVA), posing ongoing challenges for MSME working capital, credit access, and growth.
V Anantha Nageswaran, Chief Economic Advisor (CEA) to the Government of India, said, “The due amount of delayed payments is coming down, and progress in invoices discounted on the TReDS platform has increased from zero to ₹2.4 lakh crore, with more businesses onboarding. At the same time, the issue of delayed payments remains significant, and efforts cannot be slackened at this stage.”
Despite progress, the report notes persistent systemic gaps, including unequal bargaining power, complex dispute resolution, and enforcement bottlenecks.
Micro units are particularly affected, with payment delays up to three times higher than those experienced by larger firms.
Ateesh Kumar Singh, Joint Secretary, Ministry of MSME, emphasised the multifaceted nature of credit challenges, noting, “There is a gender gap in access to credit, statutory gaps, regional and sectoral disparities. It is essential to identify realistic and customized solutions to address these gaps.”
The report recommends a coordinated policy approach, including strict enforcement of timelines under Section 43Bh of the Income Tax Act, public disclosure of chronic defaulters, scaling up the Trade Receivables Electronic Discounting System (TReDS), and faster dispute resolution through strengthened Facilitation Councils and institutional arbitration.
It also advocates for expanding digital credit using GSTN and UPI data, reforming Special Mention Account classification, and automating the Samadhaan portal for real-time transparency.
Basant Kaur, Country Head of C2FO India, said, “While delayed payments have reduced, more must be done to achieve the vision of Viksit Bharat 2047. Technology-driven solutions such as TReDS, early-payment platforms, and cash-flow-based lending offer strong potential to support MSMEs.”
Ramesh Dharmaji, Senior Advisor at GAME, added, “Our reports chart the journey from highlighting delayed payments to evidencing positive policy impact. Yet, there is more to be done to resolve this chronic issue affecting millions of MSMEs and India’s economic growth.”
Neeraj Kedia, Chairman of the Banking and Finance Committee at FISME, noted, “The sustained reduction in delayed payments is encouraging, but persistent challenges around bargaining power and dispute resolution require continued collaboration from all stakeholders to ensure timely MSME payments.”
The third edition of the report highlights that while policy interventions have reduced the quantum of overdue payments, these remain equivalent to over 4.6% of India’s Gross Value Added (GVA), posing ongoing challenges for MSME working capital, credit access, and growth.
V Anantha Nageswaran, Chief Economic Advisor (CEA) to the Government of India, said, “The due amount of delayed payments is coming down, and progress in invoices discounted on the TReDS platform has increased from zero to ₹2.4 lakh crore, with more businesses onboarding. At the same time, the issue of delayed payments remains significant, and efforts cannot be slackened at this stage.”
Despite progress, the report notes persistent systemic gaps, including unequal bargaining power, complex dispute resolution, and enforcement bottlenecks.
Micro units are particularly affected, with payment delays up to three times higher than those experienced by larger firms.
Ateesh Kumar Singh, Joint Secretary, Ministry of MSME, emphasised the multifaceted nature of credit challenges, noting, “There is a gender gap in access to credit, statutory gaps, regional and sectoral disparities. It is essential to identify realistic and customized solutions to address these gaps.”
The report recommends a coordinated policy approach, including strict enforcement of timelines under Section 43Bh of the Income Tax Act, public disclosure of chronic defaulters, scaling up the Trade Receivables Electronic Discounting System (TReDS), and faster dispute resolution through strengthened Facilitation Councils and institutional arbitration.
It also advocates for expanding digital credit using GSTN and UPI data, reforming Special Mention Account classification, and automating the Samadhaan portal for real-time transparency.
Basant Kaur, Country Head of C2FO India, said, “While delayed payments have reduced, more must be done to achieve the vision of Viksit Bharat 2047. Technology-driven solutions such as TReDS, early-payment platforms, and cash-flow-based lending offer strong potential to support MSMEs.”
Ramesh Dharmaji, Senior Advisor at GAME, added, “Our reports chart the journey from highlighting delayed payments to evidencing positive policy impact. Yet, there is more to be done to resolve this chronic issue affecting millions of MSMEs and India’s economic growth.”
Neeraj Kedia, Chairman of the Banking and Finance Committee at FISME, noted, “The sustained reduction in delayed payments is encouraging, but persistent challenges around bargaining power and dispute resolution require continued collaboration from all stakeholders to ensure timely MSME payments.”
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