Excelsior Correspondent
SRINAGAR, July 17: The Federation of Chambers of Industries Kashmir (FCIK) today demanded the establishment of an Alternate Dispute Resolution Cell (ADRC) to tackle the persisting issue of delayed payments to Micro, Small, and Medium Enterprises (MSMEs) by government departments and Public Sector Undertakings (PSUs).
FCIK President Shahid Kamili emphasized the need for an ADRC equipped with sufficient powers to mediate, negotiate, and arbitrate in matters concerning delayed payments, as per the Micro, Small, and Medium Enterprises Development Act of 2006 (MSMED Act-2006).
Kamili said that the current approach of informal follow-ups and reminders by the MSME Facilitation Council (MSEFC) has proven insufficient. “According to the law, if a payment is delayed beyond 45 days, the buyer department should pay the MSME compound interest at monthly rests, three times the rate notified by the Reserve Bank of India (RBI). However, very few cases have been settled by the MSEFC in this manner,” he said.
Kamili highlighted the numerous complaints received by FCIK regarding payment delays to MSMEs, causing financial distress, disrupted cash flows, and potential insolvency.
He said payment delays have also resulted in MSME accounts slipping into Non-Performing Assets (NPA) and stressful categories, affecting their reliance on bank support. “In some cases, banks have taken action under the SAFEASI Act,” he said.
Kamili expressed regret over the State Industrial Cooperative Corporation (SICOP) withholding crores of rupees owed to MSMEs for the supply of industrial goods and works executed under schemes like “Tameer.”
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