From highlighting solutions that can solve the problem of delayed payment for MSMEs to bringing inspiring stories from Delhi and Mumbai, here’s what SMBStory covered this week.
Delayed payment represents a serious challenge for micro, small, and medium enterprises (MSMEs), impeding their growth prospects.
This week, SMBStory spoke to industry experts to understand how the government can tackle this persistent issue and strengthen MSMEs, which are the growth engine for the economy. Here’s what the experts said:
What’s the solution for delayed payments?
Profit may be the marker of success for a business, but it is the cash flow that keeps the shutters open.
Delayed payments represent a significant challenge for MSMEs, which frequently operate on tight margins and limited resources. The issue poses a threat to the viability of these businesses, which are essential for supporting the broader economy where their contribution is almost 30%.
Keen to tackle the tenacious problem, Finance Minister Nirmala Sitharaman during this year’s Budget announced that the government will allow expense deduction claims for buyers only when they make payments to suppliers. In short, a company can claim a deduction on an expense only if it has paid the supplier against that expense.
Speaking about the impact of the measure, DP Goel, Co-Chair, MSME Committee, PHD Chamber, says the step is great but might only help in 10% of cases.
“If the expense claim is not allowed by the government unless payment to MSMEs is made by the purchaser, this effect will be too slow. Who will certify whether the payment against a particular bill is released or not?” he asks.
In regular cases, payment is released in a lump sum; in other cases, it is linked with the performance of the product, especially engineering goods, which can take years. Goel says it is difficult to say if the measure will have much impact except in a few specific cases.
Other top picks of the week:
Crayon MotorsIndia’s readiness to adopt electric vehicles has been a topic of debate in recent years. EVs currently account for only around 2% of total vehicle sales. However, considering the government’s efforts being made to create an enabling EV ecosystem, the country is hoping to be a frontrunner in EV adoption.
Co-founders Rakesh Jain, Rahul Jain, and Mayank Jain of Delhi-based Crayon Motors, an escooter manufacturing company, jumped in on the EV opportunity back in 2014. Their prior experience in the EV segment with UP Telelinks Limited, their family-owned business helped them get an early start.
U.P. Telelinks Limited has been involved in manufacturing electric cables since 1985. In 2014, “when EVs had started to become mainstream”, they decided to diversify and manufacture electric rickshaws. Since then, they have been making electric rickshaws under the brand name Singham.
“Because two-wheelers are a completely different market segment with very different consumer needs, we decided to bring it into a separate company,” says Rahul Jain, Director, Crayon Motors.
Submarine Pens
Who knew pens could be more than just a writing tool? Submarine Pens has been working on that with its new offering: fragrant pens.
The Mumbai-based company’s new range of fragrant pens includes a unique coffee collection. Launched earlier this year, the collection features Americano, Cappuccino, Mocha, Espresso, Latte, and Macchiato modes, designed to give users a sensory experience with the aroma of coffee beans while writing.
The range has been created by Shalin Gandhi, Founder of Submarine Pens, who has been in the pen business for over 25 years. Submarine Pens started its journey with the metal pens business in 1995. It has since then made significant strides in the Indian pen market and has established its presence in Australia, Brazil, Canada, the European Union, the United Kingdom, the United States, and New Zealand.
The coffee collection is a new touch to its wide range of metal pens, including the crystal series, doctor clip pens, fountain series, mini pens, pens with pen drives, and more.
