MSME Payment Policy Faces Resistance from Large Corporates

Chief Economic Adviser V Anantha Nageswaran highlighted resistance from large businesses to a government policy intended to ease MSMEs' working capital issues. Despite legal amendments, corporations resist timely payments. He cited political and economic factors and discussed agriculture's future potential and manufacturing and service sector challenges.


Devdiscourse News Desk | New Delhi | Updated: 20-01-2025 20:38 IST | Created: 20-01-2025 20:38 IST
MSME Payment Policy Faces Resistance from Large Corporates
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On Monday, Chief Economic Adviser V Anantha Nageswaran highlighted the resistance from large business entities to a government policy mandating timely payments to the MSME sector. Speaking at an event organized by India Exim Bank, Nageswaran emphasized the challenges the sector faces despite the government's efforts to ease working capital issues.

Under the amended law, companies have a fiscal year to make payments and claim deductions. However, resistance persists, as corporates push back against the 45-day payment ceiling for MSMEs. Nageswaran noted that large enterprises view MSMEs as sources of working capital, not vice versa.

Additionally, he discussed agriculture's importance as a future sector, while acknowledging manufacturing and services could face global challenges due to technological and trade-related pressures. He also pointed out issues related to land use regulations affecting corporate productivity in India.

(With inputs from agencies.)

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