After Covid setback, MSMEs owed Rs 10.7 trn in pending dues: Report

The share of micro and small enterprises stood at Rs 8.73 trillion, 80 per cent of the total pending amount

India’s micro, small and medium enterprises (MSMEs) are owed pending dues worth Rs 10.7 trillion at the end of 2021, said a report by the Indian Express on Monday about a sector that was among the worst affected in the coronavirus pandemic.

The delays in payments are from private customers, government departments and public sector undertakings (PSUs), the report said. Micro and small enterprises are owed Rs 8.73 trillion, or 80 per cent of the total pending amount. 'Micro' industries are worst hit. with 65.73 per cent of their payments being delayed. 

In 2020, then MSME minister Nitin Gadkari said state governments, the centre, PSUs, and major industries owed a combined Rs 5 trillion to the MSMEs. 

Public administration firms are the worst hit by the delayed payments, the report added. 61 per cent of all the payments due to these firms have been delayed. 

It is followed by 55 per cent in the construction sector and 51 per cent in the finance, insurance and real estate sector. 

The legally recommended period for payment of dues to the MSME sector in India is 45 days. This, in 2020-21, was 195 days for micro industries. For small and medium enterprises this stood at 6 and 47 days respectively.

Units with an investment of Rs 1 crore and an annual turnover of less than Rs 5 crore are termed the 'micro' industries. 'Small' units have a turnover of less than Rs 50 crore and an investment of up to Rs 10 crore. 

'Medium' enterprises have an investment of up to Rs 20 crore with an annual turnover of less than Rs 100 crore.