“India Reduces MSME Payment Delays to ₹7.34 Lakh Crore, But Issues Still Persist” : Report

New Delhi : “MSME’s Access to Finance and Timely Payments – Delayed Payments Report 3.0” shows that India’s Micro, Small, and Medium Enterprises (MSMEs) are still struggling to receive their payments on time, even though the situation has improved compared to earlier years. The report was jointly released in New Delhi by the Global Alliance for Mass Entrepreneurship (GAME), the Federation of Indian Micro and Small & Medium Enterprises (FISME), and C2FO.

Delayed Payments Decline but Still a Large Concern

According to the latest findings, delayed receivables for MSMEs were estimated at:

• ₹7.34 lakh crore as of March 2024 (inflation-adjusted)

• Down from ₹8.27 lakh crore in 2023

• Much lower than the ₹10.7 lakh crore peak in 2022

Even with this decline, the amount of money stuck in delayed payments remains a huge obstacle for India’s 6.4 crore MSMEs, restricting their ability to maintain working capital, borrow credit, and sustain growth.

Government & Expert Insights

Chief Economic Advisor (CEA), V. Anantha Nageswaran

During the report launch, the CEA highlighted improvement in the usage of digital systems like TReDS (Trade Receivables Discounting System). He noted that invoice discounting on TReDS has grown significantly, helping businesses access early payments.
However, he also emphasized that consistent effort is needed, as delayed payments continue to impact MSME operations deeply.

Ateesh Kumar Singh, Joint Secretary, Ministry of MSME

He defined the MSME credit challenge as a mix of factors such as:

• Availability of credit

• Timeliness

• Affordability

He added that multiple gaps still exist — gender-related, sectoral, regional, and statutory — and there is a need for customised solutions that reflect the real situation of MSMEs.

Persistent Challenges Highlighted in the Report

The report points out several issues that continue to hamper MSME payment cycles:

• Power imbalance between small suppliers and large buyers

• Slow and complicated dispute resolution mechanisms

• Inefficiencies in enforcing payment timelines

• Micro enterprises face 3x higher delays compared to larger firms

• Working capital shortages due to stuck payments

• Limited access to formal and affordable credit sources

Key Recommendations to Improve MSME Cash Flow

To resolve the long-standing payment crisis, the report suggests a multi-level policy approach:

 1. Strict implementation of Section 43B(h)

Ensuring penalties for delayed payments and making defaulters publicly identifiable.

2. Wider adoption of TReDS

Integrating TReDS with GSTN, Udyam Registration, and other financial data systems to improve transparency and faster settlements.

3. Strengthening MSME Facilitation Councils

Faster and more effective dispute resolution through arbitration and improved council capacity.

4. Reforming SMA (Special Mention Account) norms

To prevent viable micro and small businesses from being pushed into early financial stress classification.

5. Improving digital credit access

Using UPI, GST, and cash-flow-based lending models to expand credit availability.

6. Upgrading the Samadhaan Portal

Automation, standard contracts, real-time tracking, and better transparency to reduce backlog of cases.

Technology-Driven Solutions Hold Promise

Experts from the MSME ecosystem believe that digital solutions will play a central role in solving the payment delay problem.
Platforms like TReDS, ULI, and improved versions of the Samadhaan portal can help unlock significant capital, boost employment, and support the Viksit Bharat 2047 vision.

C2FO India highlighted that early-payment platforms could unlock nearly 1.1% of India’s GDP and potentially increase employment by 3%–5% in small and emerging economies.