‘Include MSME dues under IBC in CIRP costs’ : FISME

New Delhi: The recovery of money owed to the micro, small and medium enterprises (MSMEs) by corporate debtors should be brought in the ambit of corporate insolvency resolution process (CIRP) costs, said the Federation of Indian Micro and Small & Medium Enterprises (FISME) in its pre-budget presentation to the Finance Minister.

The FISME said as operational creditors, the MSMEs were not able to recover dues and the protection to that under the MSMEs Development (MSMED) Act had been undermined.

“The current recovery process under the IBC is one-sided. The MSMEs are classified as operational creditors. They get nothing if their buyer undergoes CIRP. This is against the letter and spirit of the MSMED Act, which guarantees the recovery of the dues along with interest,” it said.

According to the FISME assessment, 25,000 MSMEs are affected and 75,000 more are likely to be affected. If a solution is found to repay their dues, the burden on the financial creditors would be minimal and decline to 1.18-1.33 percent, it said, citing the June 30, 2019, IBBI data. (IANS)

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