MSME DEBT RECOVERY PROVISIONS

Vidhikarya09 Dec, 2021Legal

Micro, small and medium enterprises have always been one of the main growth engines of the Indian Economy. In recognition of their contributions, the Indian Government has formulated various incentive plans to strengthen and improve the competitiveness of the MSME sector. The Government promulgated the ?Micro, Small and Medium Enterprises Act 2006.? This law gives MSME many exclusive rights so that it can further strengthen its economic activities. MSMEs around the world face limitations in maintaining combat readiness. Due to the lack of MSME capital, payment delays are a serious problem. A World Bank Group report released in January 2014 stated that 35 per cent or one in three MSMEs receive their payment only after 90 days or even more. While larger corporations are able to alleviate the adverse effects of delayed payment but managing the cash flows is a struggle for MSMEs because of the nature of their businesses.