Government fast-tracks payment backlog of Rs 30,000 crore

The government is fast-tracking pending payments worth Rs 30,000 crore to vendors. The slowdown has resulted in many industrial captains and market veterans seeking clearance of dues from the government to boost liquidity in the system. Finance Minister Nirmala Sitharaman had also recently taken cognisance of the issue and announced  that dues from the government would be cleared at a faster pace when she unveiled her first set of relief measures for the economy two weeks ago.

The construction sector has been facing liquidity crunch and CNBC-TV18 learns that the National Highways Authority of India (NHAI) will clear Rs 12,000 crore worth of pending bills to its vendors and contractors. Payments will be also made automatically for certain bills raised which have been pending for a certain period now.

North Block sources have also told CNBC-TV18 that the government is fine tuning the payment process, by which bill amounts showing a pendency beyond a certain time period will automatically get released thus holding the CPSEs further accountable and fast tracking the payment mechanism.

Finance Minister Nirmala Sitharaman had said, “A lot of payments are getting delayed from government departments or central public sector enterprises (CPSEs). These delayed payments...will be monitored by the department of expenditure, and the performance will be reviewed by the cabinet secretariat with a dashboard in front of them. Except in cases under litigation, we will clear up all dues."

The government is also pushing for faster clearance after disputed cases are settled. Sources have told CMBC-TV18 that the government wants that post arbitration, payments should be made against bank guarantees so that the ball is kept rolling.