look news india
Mumbai: It is learned that the government is considering relaxing the new payment norms for micro, small and medium enterprises (MSMEs) that came into effect from April 1. Government sources said that the payment standard, which is currently 45 days, is being considered to be increased to 60 days.
Concerns about business disruption due to the new rule have increased. The government may amend the rule in the full budget to be announced after the elections. The MSME Ministry has discussed this with the Finance Ministry and it is likely to be announced in the July Budget.
The 45 day payment standard is expected to increase cash flow to MSMEs, while on the other hand, there are claims of cancellation of orders from big companies.
Some sections of MSMEs are claiming that larger companies are partially cutting orders keeping in mind the possibility of increased working capital requirement due to the new norms.
Companies not complying with the standard will face penalties. Before the implementation of the standard, MSMEs had to wait for 80 to 100 days for payment after selling goods.
It was also said earlier by various retail associations that it is very difficult for retailers to set a 45-day payment cycle.