The new year could bring relief for Micro, Small and Medium Enterprises (MSMEs) in India facing disputes with central government agencies due to the COVID-19 pandemic. The Centre has revived the Vivad Se Vishwas I scheme, which allows MSMEs to submit fresh claims for settlement. The original scheme settled claims between mid-April and end of July this year, amounting to ₹650 crore in approximately 44,000 cases. The new window for filing claims under the scheme will be open from January 1, 2024, until March 31.

The Department of Expenditure in the Finance Ministry stated in an office memo that eligible MSMEs couldn’t lodge their claims on the portals earlier due to a lack of information about the scheme. With this in mind, the Department has extended the deadline for filing claims. The Vivad Se Vishwas (VSVS) I scheme, announced in the Union Budget 2023-24, provides relief to MSMEs that were unable to comply with central government contracts due to the pandemic.

The scheme, launched on April 11, covers all procurement contracts related to goods, services, and works entered into by government departments. However, MSMEs have raised concerns about the scheme’s implementation. They claim that the government did not adequately disseminate information about the scheme, leading to a lack of awareness. Additionally, MSMEs argue that they should not be required to file a claim to retrieve their earnest money or security deposits with the government, regardless of whether they completed their contract or not.

KE Raghunathan, national chairman of the Association of Indian Entrepreneurs, pointed out the gap between the government’s intent and its directions regarding the scheme. Raghunathan stated that the scheme seems designed to prevent even genuine users from availing its benefits. He emphasized the need for MSMEs’ security deposits to be returned with interest, as failing to do so could result in a loss of nearly 36% of the sum in three years.

In addition to Vivad Se Vishwas I, the government had also launched the Vivad Se Vishwas II scheme to resolve pending contractual disputes related to public procurement. Claims under this scheme were accepted until October, and settlements worth ₹1,652 crore had been made by mid-December. The revival of the Vivad Se Vishwas I scheme provides another opportunity for COVID-19-hit MSMEs to settle their claims and receive relief.

Source: The Hindu