FinMin asks depts, CPSEs to refund 95% of MSMEs securities till March 2022

The Finance Ministry asked all depts and public sector entities to refund 95% of the performance or bid security and liquidated damages forfeited from small and medium businesses in govt tenders

Finance Minister Nirmala Sitharaman presented her fifth Budget
Finance Minister Nirmala Sitharaman
Press Trust of India New Delhi
3 min read Last Updated : Feb 06 2023 | 11:17 PM IST

The Finance Ministry on Monday asked all departments and public sector entities to refund 95 per cent of the performance or bid security and liquidated damages forfeited/deducted from small and medium businesses in government tenders for over two years till March 31, 2022.

To give relief to MSMEs, Finance Minister Nirmala Sitharaman in 2023-24 Budget announced 'Vivad se Vishwas-I' scheme which provides that in cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by government and government undertakings.

The Finance Ministry's Expenditure Department on Monday issued an office memorandum stating that all contractors or suppliers registered as micro, small and medium enterprises (MSME) with the Ministry of MSME as on March 31, 2022, would be eligible to claim a refund of the forfeited amount for contracts which had an original delivery or completion period between February 19, 2020, and March 31, 2022.

"The Ministry of Finance today provided a major relief to MSMEs for COVID-19 period. In an order issued by the Department of Expenditure, Ministries have been asked to refund performance security/ bid security and liquidated damages forfeited/ deducted during the Covid-19 pandemic," an official statement said.

Speaking with PTI, Finance Secretary T V Somanathan had earlier said that the Vivad se Vishwas-I scheme announced in the Budget gave relief to small and medium businesses that could not fulfil their contractual obligations during the Covid period.

"We are assuming ... we are giving them the benefit of doubt and saying that this (inability to supply during the Covid period) must have been due to circumstances beyond your control. We are not even getting into the actual reasons. We are giving a relief. 95 per cent of the forfeited amount will be returned to them regardless of the reasons for their failure. So it is a simple non-discretionary relief which is given to them," Somanathan said.

This relief will be provided in all contracts for the procurement of goods and services, entered into by any Ministry/ Department/ attached or subordinate office/ autonomous body/ Central Public Sector Enterprise (CPSE)/ Public Sector Financial Institution etc. with MSMEs.

The grant of relief will be monitored through Government e-Marketplace (GeM) and MSME vendors will be able to register on the GeM portal and enter details of the applicable contracts. The nodal officers of each procuring entity would verify the claim of the vendor and refund the due amount.

The portal will also provide reports to track pendency with each procuring entity. The date of commencement of the process of applications for relief through GeM will be notified separately, the Finance Ministry added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :CPSEMSMEsFinance minister

First Published: Feb 06 2023 | 10:17 PM IST

Next Story