Government to implement MSMEs’ relief plan by next month

The central government is attempting to put into effect two significant "relief packages" announced for commercial disputes and MSMEs.

In accordance with the Union Budget 2023–24, in the event that an MSME fails to fulfil contracts within the COVID–19 term, the government would refund 95% of the forfeited sum related to the bid or performance security.

"The department of expenditure has notified the scheme, and the website will be ready under the Government e-Marketplace (GEM) portal in a few weeks, most likely before June. We will invite applications, and money will be returned accordingly by the concerned ministries," a senior government official said.

A voluntary settlement plan with standardised terms is envisioned in the second iteration of the "Vivad se Vishwas" scheme, which is intended to settle contractual disputes. To reduce litigation, this will be accomplished by grading settlement terms according to the status of the case.

"We sought and received many comments on the discussion paper that was floated last month. The participating stakeholders are from government bodies like NHAI, and others include private contractors. We have a meeting next week to review these comments before the final settlement scheme is ready. The aim is to offer resolution and reduce litigation," added the official.

Almost 90% of these cases are anticipated to be resolved by the centre. According to sources, phase two of the programme involving contractors may be difficult to resolve due to the nature of conflicts.

According to a report by the Parliamentary standing committee from March 2022, the claims made by private contractors in disagreements over highway projects carried out by NHAI were projected to be close to Rs 88,100 crore in arbitration in the last five years.

By paying 100% of the contested tax and 25% of the disputed penalty, interest, or charge, the Vivad Se Vishwas programme allows for the settlement of disputed tax, disputed interests, disputed penalty, or disputed fees in respect to an assessment or reassessment order.