Vivad se Vishwas Scheme Launched for relief to MSMEs for COVID-19 Period

Vivad se Vishwas Scheme: It is a government scheme for providing relief to Micro, Small and Medium Enterprises (MSMEs) during the COVID-19 period. Vivad se Vishwas I – Relief to MSMEs is also important for UPSC Prelims Exam 2023 and UPSC Mains Exam (GS Paper 2- Various government schemes and initiatives for promotion and protection of various sectors of economy).

Vivad se Vishwas Scheme in News

A scheme named “Vivad se Vishwas I – Relief to MSMEs” has been launched by the Department of Expenditure, Ministry of Finance to provide relief to Micro, Small, and Medium Enterprises (MSMEs) for the COVID-19 period.

Vivad se Vishwas Scheme Details

During the Union Budget speech, Union Finance Minister Smt. Nirmala Sitharaman announced the scheme “Vivad se Vishwas I – Relief to MSMEs” for providing relief to Micro, Small and Medium Enterprises (MSMEs) during the COVID-19 period.

• Background: In the Union Budget speech she stated that MSMEs failing to execute contracts during the COVID period would receive a return of 95% of the forfeited amount relating to bid or performance security from the government and government undertakings, providing relief to MSMEs.
• Parent Ministry: The Department of Expenditure, Ministry of Finance, had issued an order on 06.02.2023 indicating the broad structure of the scheme.
  • Final instruction in this regard, extending the relief to cover more cases and relaxing the limits of refunds was issued on 11.04.2023.
• Implementation: The Vivad se Vishwas scheme was commenced from 17.04.2023 and the last date for submission of claims is 30.06.2023.
  • Government e-Marketplace (GeM) has developed a dedicated web-page for implementation of this scheme. Eligible claims shall be processed only through GeM.

Vivad se Vishwas Scheme Eligibility Criteria

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 UTs, 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 the following criteria:

• Registered as a Medium, Small or Micro Enterprise as per relevant scheme of Ministry of MSME on the date of claim by supplier/ contractor. MSME could be registered for any category of Goods and Services.
• The original delivery period/ completion period stipulated in contract was between 19.02.2020 and 31.03.2022 (both dates are inclusive).

Vivad se Vishwas Scheme Benefits

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. The Ministry of Finance, through this scheme, decided to give 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.
  • 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.

Vivad se Vishwas Scheme Significance

The MSME sector has been severely affected by the COVID-19 pandemic, which is one of the biggest crises in human history.

• The launch of the “Vivad se Vishwas I – Relief to MSMEs” scheme by the Department of Expenditure, Ministry of Finance, is a significant step towards providing support to these businesses during this difficult time.
• The Vivad se Vishwas relief scheme builds on the government’s ongoing efforts to promote and sustain the MSME sector.

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