"Delayed payments not only affect individual MSMEs but also impacts competitiveness of economy as a
Harish (name changed), a pharmaceutical manufacturer with an annual turnover of Rs 1.5 crore is trying to perfect the balance between sales and collection of payments on time. His buyers, pharma distributors, have been delaying payments owing to Covid. Instead of getting paid within a month as agreed, he often receives payments two months after supplying the goods. Despite the month’s delay, he needs to take care of expenses such as employee salaries, supplier payments, and GST.
Global Alliance for Mass Entrepreneurship and Dun and Bradstreet India estimate the magnitude of the delayed payments due to MSMEs to be up to Rs 10.7 lakh crore, equivalent to almost 6% of India’s GVA (Gross Value Added).