Payment of MSMEs Should Get Released in 45 Days, Says Nitin Gadkari
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The backbone of Indian economy, the Micro, Small and Medium Enterprises have been suffering from delayed payments for longer than ever. Not getting their due on time tires the small business owners and ultimately, become a core reason behind the demise of their enterprise. The Union Minister of MSMEs, Nitin Gadkari aims to get rid of this “headache”.
Speaking at a convention of 'Laghu Udyog Bharti', an RSS-linked outfit which works in MSME sector, he said, “The small scale industry producer never gets payments on time. And this tires and finishes him. I am seriously thinking, whether it is private or public sector or government, that the payment of MSME should get released in 45 days, and I am trying to take some concrete decision on this.”
In February this year, the Ministry of Corporate Affairs notified new guidelines that suggested directors of companies delaying payments to small businesses could face imprisonment up to six months or face fines between INR 25,000 and INR 3 lakh. The government also made it mandatory for all companies to file half yearly returns showing outstanding dues to MSME suppliers.
MSMEs currently contribute 24 per cent to the nation’s Gross Domestic Product (GDP) but in the coming years, Gadkari aims to increase the share to 50 per cent. He stressed that “Entrepreneurs should think big.” At present, nobody wants to expand to not get out of the MSME bracket and continue to enjoy subsidies. He pointed out that to become a 5 trillion dollar economy, this has to change.
“Entrepreneurs should come to me with to set up industrial clusters for a particular sector. I will immediately sanction and provide them subsidies. However, they will have to sign an affidavit that if they are unable to create a certain number of jobs within the deadline, they will pay back the subsidy amount,” Gadkari said.
MSMEs play a big in the creation of employment. Until now, the sector has produced 11.50 crore jobs but has the potential for more. “In these five years I am aiming to add five crore more employment opportunities,” Gadkari said. Keeping the agrarian crisis in mind, he encouraged the youngsters to focus on handloom, handicrafts and agro processing industries.
During his address, Gadkari encouraged the youngsters to embrace entrepreneurship. He urged them to become job creators and not job seekers. “We have to do maximum capital investment in MSME sector to create job opportunities,” he said. One step towards the goal he suggested would be the production and promotion of green energy.
“The MSME sector must go for biofuel manufacturing in a big way. Farmers should be encouraged to cultivate trees like Jatropha for biofuel production,” he said. “We are importing crude oil worth thousands of crores. This should be substituted by biofuels. The sector has the potential of attracting capital investment of INR 5 lakh crore and creates 50 lakh jobs.
My aim is to replace diesel with biodiesel in six districts of Nagpur division in the next five years,” he said. Gadkari further urged the entrepreneurs to manufacture organic plastic. Gadkari expressed, “With the works we have undertaken in these five years, Delhi will be completely free of air and water pollution before we complete our five years.”
To this day, various initiatives have been taken to control pollution levels in Delhi with minimalistic results. It will be interesting to see if Gadgari will be able to walk the talk.