Indian Economy News

Government launches Vivad se Vishwas scheme for relief to MSMEs for COVID-19 period, as announced in the Union Budget 2023-24

The "Vivad se Vishwas I-Relief to MSMEs" scheme has been launched by the Department of Expenditure, Ministry of Finance, to provide relief to Micro, Small and Medium Enterprises (MSMEs) during the COVID-19 period. The programme was announced by Union Finance Minister Ms. Nirmala Sitharaman in the Union Budget 2023-24.

On February 6, 2023, the Ministry of Finance's Department of Expenditure published an order outlining the general framework of the programme. On April 11, 2023, the final directive in this regard was released, expanding the scope of the relief and lowering the refund cap. The system began on April 17, 2023, and the deadline for submitting claims is June 30, 2023.

The relief provided under this scheme is in continuation of the efforts of the government in promoting and sustaining the MSME sector.

The scheme calls for Ministries to reimburse performance security, bid security, and liquidated damages that were lost or reduced due to the COVID-19 epidemic. MSMEs prohibited for failing to execute contracts during the COVID-19 period have also received some relief.

The Ministry of Finance, through this scheme, decided to give the following additional benefits to eligible MSMEs, affected during the COVID-19 period:

  • 95% of the performance security forfeited shall be refunded.
  • 95% of the Bid security shall be refunded.
  • 95% of the Liquidated Damages (LD) deducted shall be refunded.
  • 95% of the Risk Purchase amount realized shall be refunded.
  • In case any firm has been debarred only due to default in execution of such contracts, such debarment shall also be revoked, by issuing an appropriate order by the procuring entity.

A dedicated web page has been created by Government e-Marketplace (GeM) for the implementation of this programme. Only GeM shall be authorised to process eligible claims.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.