CHENNAI: The state’s push to ensure timely payments to MSMEs has faltered, with only 22 of Tamil Nadu’s over 60 PSUs actively using the Trade Receivables Discounting System (TReDS) platform — despite a GO making participation mandatory.
The TReDS mechanism, designed to allow MSMEs to channelise their invoices and payments through banks and financiers to ease cash-flow pressures, has seen poor adoption among state-owned entities. Concerned by the slow uptake, the Finance Department has issued a circular directing all PSUs, statutory boards, apex cooperatives and municipal corporations to operationalise the platform without delay.
The letter, signed by Expenditure Secretary Prashant M Wadnere, instructs departments to appoint a senior officer — at least of general manager rank — as a nodal officer to oversee the uploading, settlement and monitoring of MSME invoices. Departments must submit monthly reports to the industries commissioner, the director of industries and commerce, and the finance department.
“Many PSUs are making loss and face fund shortage which affect their compliance,” said CK Mohan, president of Tamil Nadu Small and Tiny Industries Association. Mohan urged the state to strengthen the TReDS framework and widen its reach. He also called on the centre for lowering the threshold for mandatory participation from Rs 250 crore in annual turnover to Rs 50 crore.