Government to clear dues of MSMEs by October first week, says FM Nirmala Sitharaman

New Delhi: XFinance Minister Nirmala Sitharaman on Friday directed all central ministries to clear by the first week of October all pending dues of Rs 20,000 crore that they owe to the micro, small and medium enterprises (MSMEs).

She made it clear to them not to sit on the suppliers' dues. She also claimed "buoyancy" in the economy as the consumption was on rise and the credit offtake was growing.

She said her priority right now is to let the government departments and the public sector enterprises spend more to reverse the economy slowdown.

Sitharaman, however, refused to discuss the fiscal deficit now, saying that will be tackled later when asked about the fiscal discipline necessary after big rebate in the corporate tax last week.

The finance minister was talking to reporters after holding a meeting with the secretaries and financial advisers of the key central ministries on the MSMEs' complaint that their payments were not being cleared, affecting their business and employment.

"The larger story is that government will not sit on payment dues.....Money should go where people have been waiting. Money should get going to the ground level," the minister said.

Expenditure Secretary G C Murmu said out of total outstanding MSME dues of about Rs 60,000 crore, various ministries have already paid off Rs 40,000 crore and the remaining amount not involved in litigation will also be cleared next week.

Sitharaman also claimed that 90% of the overdue GST refunds have been cleared since August 23. She said the government will ensure that there are no outstanding payments.

She said the ministries have been asked to provide detailed capital expenditure plans for the next four quarters as the government is looking at boosting growth through the spending push.

In reply to a question, the expenditure secretary said most infrastructural ministries have already reached 50% of their capex target for the current fiscal, endorsing the minister's claim that the government's capital expenditure was on track and the budget estimates would be met.

The finance minister said she was also meeting the heads of the public sector enterprises on Saturday to review their capital expenditure plans to give a push to the economy.

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