Small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs) are advocating for an extension of the current 45-day payment rule to up to 180 days. This proposal aims to provide businesses with greater financial flexibility amidst economic uncertainties and operational challenges. The request comes as part of efforts to influence the new government to amend regulations in favour of accommodating longer payment cycles.

Currently, SMEs and MSMEs face cash flow issues due to delayed payments from larger companies and government agencies, impacting their operational efficiency and growth. Extending the payment window to 180 days is seen as a potential solution to mitigate these challenges, offering businesses more time to manage their finances and sustain operations effectively.

Advocates argue that a longer payment period would align with global practices and provide SMEs and MSMEs with breathing space to navigate economic fluctuations. They emphasise the need for a balanced approach that supports both the liquidity requirements of smaller businesses and the operational needs of larger entities.

The push for regulatory changes underscores the importance of fostering a conducive business environment that supports the growth and resilience of SMEs and MSMEs in India. By addressing payment delays through policy amendments, the government can potentially enhance the economic sustainability and competitiveness of these vital sectors.