Govt to implement relief plan for MSMEs by next month

The central government is working to implement two major "relief packages" announced for micro, small, and medium enterprises (MSMEs), as well as commercial disputes

As per the Union Budget 2023-24, the government will return 95 per cent of the forfeited amount related to the bid or performance security in case of a failure by a MSME to execute contracts during the COVID-19 period.

"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 told Business Today television.

In the second version of the 'Vivad se Vishwas' scheme, which is meant to settle contractual disputes, a voluntary settlement scheme with standardized terms is envisaged. This will be done by grading settlement terms depending on litigation pendency to reduce litigation.
 
"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.

The center expects to solve close to 90 per cent of these cases. Sources also said that, because of the nature of disputes, there could be some complexities in solving part two of the scheme related to contractors.

The claims raised by private contractors in disputes over highway projects undertaken by NHAI were estimated to be close to Rs 88,100 crore in arbitration in the last five years, according to a Parliamentary standing committee report from last year, March 2022.

The Vivad Se Vishwas scheme provides for settlement of disputed tax, disputed interests, disputed penalty or disputed fees in relation to an assessment or reassessment order on payment of 100 per cent of the disputed tax and 25 per cent of the disputed penalty or interest or fee.

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