Vivad Se Vishwas-I Scheme: Over 10,000 MSME claims worth INR 256 Cr For Refunds Okayed

The government has approved more than 10,000 claims of MSMEs under Vivad se Vishwas - I scheme aimed at providing relief to MSMEs for the Covid 19 Pandemic period. The claims involve refunds of INR 256 crore.

Under the scheme, micro, small, and medium enterprises could claim a refund of 95 per cent of the performance and bid security and liquidated damages deducted by various government departments and public sector entities during the global pandemic. Relief was also provided to MSMEs debarred for default in execution of contracts.

The Ministry of Petroleum and Natural Gas (MoPNG) has granted the highest relief of INR 116.47 crore, which includes both settled claims and payments by the agencies under the administrative control of the MoPNG.

The Ministry of Railway accepted claims from 2,090 eligible MSMEs and provided relief to the extent of INR 79.16 crore. Relief worth INR 23.45 crore was provided to 424 MSMEs by the Ministry of Defence.

The relief efforts provided under Vivad se Vishwas- I scheme were in continuation to the efforts of the Government in promoting and sustaining the MSME sector hit by the Covid 19 pandemic.

Amount Disbursal By Different Ministries:

Ministry Of Petroleum And Natural Gas

Claims accepted: 2,807

Amount paid: INR 116.47 crore

Ministry Of Railway

Claims accepted: 2,090

Amount paid: INR 79.16 crore

Ministry Of Defence

Claims accepted: 424

Amount paid: INR 23.45 crore

Ministry Of Steel

Claims accepted: 244

Amount paid: INR 14.48 crore

Ministry Of Power

Claims accepted: 119

Amount paid: INR 6.69 crore

What Is The Vivad Se Vishwas Scheme For MSMEs?

The relief scheme was announced by the Union Finance Minister in her Budget Speech 2023-24. The launch of the scheme was done through a dedicated Government e-Marketplace (GeM) portal on April 17, 2023. The last date for submission of claims for relief under the scheme was July 31, 2023.

Instructions highlighting the scheme and the procedure for submitting claims were issued by the Department of Expenditure on April 11, 2023. The scope of the scheme was subsequently expanded to include works procurement and earning contracts.

The scheme was aimed at easing the financial burden on MSMEs and promoting their growth by returning 95 per cent of the deducted bid fee or performance security in case of the non-execution of contracts during the pandemic.

Earlier, to support the eligible MSMEs under the Aatmanirbhar Bharat Abhiyan, an Emergency Credit Line Guarantee (ECLG) scheme was launched in May, 2020. The aim of the scheme was to support the businesses in fulfilling their operational liabilities after the disruption caused by the Covid 19 pandemic.

Launched during the Covid crisis as a part of the relief package, the scheme provided 100 per cent guarantee coverage to the banks and NBFCs, to encourage lending to MSMEs who were facing a liquidity crunch due to delayed payments and Covid-induced lockdowns.

The Ministry of Finance stated that 1.19 crore borrowers have benefited from guarantees amounting to INR 3.61 lakh crore under ECLGS as on January 31, 2023.

The emergency credit line scheme, which was closed on March 31, 2023, enabled enterprises to avail of an additional 20 per cent loan on the amount of existing loans outstanding with banks.