The Vivad Se Vishwas I Relief for MSMEs scheme, introduced in this year’s budget by Finance Minister Nirmala Sitharaman to address lingering disputes concerning government contracts during the Covid-19 pandemic, has successfully processed more than 10,000 claims submitted by MSMEs, as stated by the finance ministry. This initiative has resulted in refunds totaling over Rs 256 crore being disbursed to MSMEs, and it has also facilitated a boost in bank credit due to the release of guarantees.
The Ministry of Petroleum and Natural Gas (MoPNG) emerged as the leading contributor, providing relief of Rs 116.47 crore through the acceptance of 2,807 claims. This figure encompasses both the claims that were resolved and the amounts paid by entities under MoPNG’s administrative purview.
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Other government ministries actively participating in the scheme include the railways, which disbursed Rs 79.16 crore and resolved 2,090 claims; the defense sector, with a disbursement of Rs 23.45 crore and resolution of 424 claims; the steel industry, which paid out Rs 14.48 crore while settling 244 claims; and the power sector, disbursing Rs 6.69 crore and settling 119 claims.
The scheme was launched in April of this year through the Government e-Marketplace (GeM) portal, offering MSMEs the opportunity to file claims for relief. The deadline for submissions was July 31st. Under the scheme’s provisions, MSMEs unable to fulfill government contracts during the Covid-19 period were eligible for a 95 percent refund of various components, including performance security, bid security, liquidated damages (LD), and the risk purchase amount forfeited or deducted.
To qualify for a claim, the original delivery or completion period stipulated in the contract had to fall between February 19, 2020, and March 31, 2022. Additionally, only government-registered MSMEs were permitted to participate in the scheme. They were required to provide contract details such as contract number, contracting authority, paying authority, and the deducted amount associated with the respective procuring entity.