New Delhi:
The Government has launched the ‘Vivad se Vishwas scheme for relief to the Micro, Small
and Medium Enterprises for Covid-19 period, as announced in the Union Budget 2023-24 by Finance Minister Nirmala Sitharaman. The initiative to provide succour to MSMEs comes
into play in cases of failure by MSMEs to execute contracts during the Covid period. In such
a case, as provided for in para 66 of the Union Budget speech, 95 per cent of the forfeited
amount relating to bid or performance security will be returned to the MSMEs by
Government and Government undertakings.
The pandemic had a devastating impact on economy, especially MSMEs. The relief provided
under this scheme is in continuation to the efforts of the government in promoting and
sustaining the MSME sector. The Department of Expenditure, Ministry of Finance, had
issued an order on 6 February, 2023, indicating the broad structure of the scheme and the
final instruction in this regard, extending the relief to cover more cases and relaxing the limits of refunds was issued on 11 April, 2023. The scheme commenced from 17 April, 2023 and the last date for submission of claims is 30 June, 2023. Under the scheme, Ministries have been asked to refund performance security, bid security and liquidated damages forfeited/ deducted during the Covid-19 pandemic. Certain relief has
also been provided to MSMEs debarred for default in execution of contracts during the
COVID-19 period. Besides, 95 per cent of the performance security forfeited being refunded
and 95 per cent of the bid security also refunded, the Ministry of Finance has decided to
additional benefits to eligible MSMEs affected during the Covid-19 period. The MoF will also
refund 95 per cent of the Liquidated Damages (LD) deducted, and further, 95 per cent of the Risk Purchase amount realized shall be refunded. Moreover, 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. However, in case a firm has been ignored for placement of any contract due to debarment in the interim period (i.e. date of debarment and the date of revocation under this order), no claim shall be entertained. No interest shall be paid on such refunded amount. As per the office memorandum issued by the Department of Expenditure to secretaries of all
the ministries/ departments of Government of India and chief secretaries/ administrators of
union territories, relief will be provided in all contracts for procurement of goods and
services, entered into by any ministry/ department/ attached or subordinate office/
autonomous body/ central public sector enterprise (cpse)/ central public sector banks/
financial institution etc. with MSMEs which meet certain criteria. The unit would have to be
registered as a MSME as per relevant scheme of Ministry of MSME on the date of claim by
supplier/ contractor. The MSME could be registered for any category of goods and services.
The original delivery period/ completion period stipulated in contract should be between 19
February, 2020 and 31 March, 2022 (both dates are inclusive). The Government e- Marketplace (GeM) which will be the sole body to process all eligible claims, has developed
a dedicated web-page for implementation of this scheme.
