Economy News

Ministry of Finance asks departments and CPSEs to repay 95% of confiscated performance guarantee/bid from MSMEs until March 2022 – Mintpaisa

The Ministry of Finance on Monday asked all public sector departments and entities to refund 95% of the performance or bid bond and liquidated damages forfeited/deducted from small and medium enterprises in government tenders. for more than two years until March 31, 2022. to MSMEs, the Minister of Finance Nirmala Sitharaman announced in the 2023-2024 budget the program “Vivad se Vishwas-I” which provides that in the event of non-execution of contracts by MSMEs during the Covid period, 95% of the confiscated amount related to supply or performance security will be returned to them by the government and government enterprises.

The Expenditure Department of the Ministry of Finance issued a memo on Monday stating that all contractors or suppliers registered as Micro, Small and Medium Enterprises (MSMEs) with the Ministry of MSMEs as of March 31, 2022, would be eligible for request reimbursement of the sums lost. amount for contracts whose initial delivery or performance period was between February 19, 2020 and March 31, 2022.

“The Ministry of Finance has today provided major relief to MSMEs for the COVID-19 period. In an order issued by the Department of Expenditure, Ministries were directed to repay the Performance Bond/Bid Bond and the liquidated damages forfeited/deducted during the Covid-19 pandemic,” an official statement read.

Speaking to PTI, Finance Secretary TV Somanathan had previously said that the Vivad se Vishwas-I scheme announced in the budget provided relief to small and medium-sized businesses that could not meet their contractual obligations during the Covid period.
“We assume…we give them the benefit of the doubt and say that this (the inability to supply during the Covid period) must have been due to circumstances beyond your control. We don’t even get into the actual reasons. We 95% of the confiscated amount will be returned to them regardless of the reasons for their failure, so it is simply non-discretionary relief given to them,” Somanathan said.

This relief will be provided for in all contracts for the purchase of goods and services entered into by any attached or subordinate ministry/department/office/autonomous agency/central public sector enterprise (CPSE)/public sector financial institution, etc. with MSMEs.

The granting of relief will be monitored through the Government e-Marketplace (GeM) and MSME vendors will be able to register on the GeM portal and enter details of applicable contracts. The nodal agents of each procuring entity would verify the seller’s claim and reimburse the amount owed.

The portal will also provide reports to track progress with each procuring entity. The start date for the process to apply for relief through GeM will be notified separately, the finance ministry added.


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