Rs. 256 crore relief grant to MSMEs ensures bank credit flow and freeing up guarantees

In a major relief to the Micro, Small and Medium Enterprises (MSMEs), various Ministries/ Departments of Government of India have accepted 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. This has led to grant of more than Rs. 256 crore to MSMEs and increased flow of bank credit through freeing up of guarantees.

The highest relief of Rs. 116.47 crore has been granted by the Ministry of Petroleum and Natural Gas (MoPNG). This includes the claims settled and amount paid by the agencies under the administrative control of the MoPNG.

Performance of TOP FIVE Ministries in terms of claims settled and amount paid is given in the table below:

Name of Ministry	Amount paid (crore)	Number of claims accepted
Ministry of Petroleum and Natural Gas	116.47	2,807
Ministry of Railways	79.16	2,090
Ministry of Defence	23.45	424
Ministry of Steel	14.48	244
Ministry of Power	6.69	119

The Vivad se Vishwas I – Relief for MSMEs scheme was announced by the Union Finance Minister in the Budget Speech 2023-24. The scheme was launched by Ministry of Finance through Government e-Marketplace (GeM) portal on 17.04.2023.  The last date for submission of claims for relief, on the GeM portal, under the scheme was 31.07.2023.  GeM had developed a dedicated portal for the purpose of this scheme.

The Department of Expenditure had issued instruction detailing the scheme and procedure for lodging claim on 11.04.2023. Scope of the scheme was subsequently expanded to include works procurement and earning contracts. Under the scheme relief by way of refund of 95% of the deducted performance security, bid security and liquidated damages was provided. Relief was also provided to MSMEs debarred for default in execution of contracts. The relief provided under this scheme were in continuation to the efforts of the Government in promoting and sustaining the MSME sector severely impacted by the COVID-19 pandemic.

MSME relief under Vivad se Vishwas I: claims accepted and 95% refunds of contract securities provided, freeing guarantees. Vivad se Vishwas I is a GeM portal scheme for MSMEs that provided refund of 95% of deducted performance security, bid security and liquidated damages, extended to works procurement and earning contracts, and offered relief to debarred MSMEs. Launched following Department of Expenditure instructions of 11.04.2023 and budget announcement, the scheme accepted over ten thousand claims across Ministries within the prescribed submission window, with aggregate payments processed and guarantees freed to facilitate bank credit.