FM expressed concerns over an issue of payment of dues to micro, small, and medium enterprises and asked big corporates to clear their dues
New Delhi: Union finance minister Nirmala Sitharaman on Tuesday urged India Inc to invest in India, asking what was stopping them from investing at a time when the entire world was putting money into India. Besides, she also expressed concerns over an issue of payment of dues to micro, small, and medium enterprises (MSMEs) and asked big corporates to clear their dues, adding that smaller businesses will need equal support from both the government and larger established firms.
The finance minister’s remarks come at a time when the government is making concerted efforts for an investment push in order to revive the country’s economic growth. Drawing a parallel between India Inc and mythological character Lord Hanuman, Ms Sitharaman also said the government is willing to engage with the industry and take policy action.
“Is it like Hanuman? You don’t believe in your own capacity, in your own strength and there got to be someone standing next to you and say you are Hanuman, do it? Who is that person going to tell Hanuman? It can’t certainly be the government,” Ms Sitharaman added.
Exhorting Indian industrialists to invest, she said, “Foreign direct investors as well as foreign portfolio investors are showing confidence to invest in India. If it is not sort of impertinent to say this now, I equally would like to know from the Indian industry what it is that they are hesitant about,” she asked while speaking at the Hero Mindmine Summit here.
“Since 2019, when I took charge of the finance ministry, I have been hearing that the industry doesn’t think it’s (environment) conducive. All right! The corporate tax rate was brought down. I keep defending the industry even when people provocatively ask me what I would like to tell the private sector,” the finance minister said.
In a move to boost manufacturing and encourage India Inc, the Indian government last year rolled out production-linked incentive scheme as part of Atmanirbhar Bharat with a massive outlay of about Rs.2 lakh crores for more than 14 sectors, including automobiles and auto components, white goods, textiles, etc. “So, this is the time for India. We cannot miss the bus,” she added.
Commenting on the overall investment environment scenario, Ms Sitharaman also said companies, who are moving out of China and looking to relocate to India, were doing (investing) so because they find the Indian policy ecosystem a lot more attractive and facilitative for such a move.
Favouring small business houses, Ms Sitharaman asked big corporate houses to clear dues to MSMEs, saying that smaller businesses will need equal support from both the government and larger established firms. “Support to the MSMEs is not just what the government can give. It is certainly largely dependent on that. There are pending payments from Central and state governments and Central and state-owned entities. But I was surprised to find that considerable due pending payments were also from the big industries,” she said.
Ms Sitharaman said she could push public sector undertakings (PSUs) and departments and can request states, “I can only appeal to the industry. For all the tears that we shed for the MSMEs, can we limit the time by which the MSME get dues? It was encouraging that larger companies were including the amounts owed to MSMEs in their annual statements, but said they also needed to clear these dues,” she added.
The MSMEs are the worst hit with 65.73 per cent of their payments being delayed. As per reports, India’s MSMEs were owed dues worth `10.7 lakh crores at the end of 2021. The delays in payments are from private customers, government departments, and PSUs. Of this, micro and small enterprises are owed `8.73 lakh crores, or 80 per cent of the total pending amount.