Government launched  ‘Vivad Se Vishwas’ trust scheme from dispute to relief micro, small and medium enterprises for Covid-19 period, announced in 2023-24 central budget

The Department of Expenditure, Ministry of Finance has launched the scheme “ Vivad Se Vishwas  – I   Relief to MSMEs ” to provide relief to the Micro , Small and Medium Enterprises (MSMEs) during the Covid period. The scheme was announced in the Union Budget 2023-24 by Union Finance Minister Smt. Nirmala Sitharaman in her budget speech. He said in Article 66 of the Union Budget-

“ In cases of failure of MSMEs to execute contracts during the Covid period , 95 per cent of the forfeited amount relating to bid or performance security will be returned to them by the government and government undertakings. This will give relief to MSMEs ” .

The Department of Expenditure, Ministry of Finance, issued an order on 06.02.2023 indicating the broad framework of the scheme. Final instructions in this regard were issued on 11.04.2023 for extension and relaxation of refund limits to cover the losses suffered by the Micro, Small and Medium Enterprises affected by COVID. The scheme was launched from 17.04.2023 and the last date for claim submission is 30.06.2023.

One of the biggest crises in human history , the COVID-19 pandemic has had a profound impact on the economy. The pandemic has had a devastating impact on MSMEs in particular. The relief provided under this scheme is a reflection of the efforts of the government in promoting and sustaining the MSME sector.

Under the scheme , the ministries have been asked to provide performance security , bid security and compensation for damages forfeited/deducted during the Covid – 19 pandemic.

Ministry of Finance through this scheme has decided to extend the following additional benefits to the affected MSMEs during the Covid – 19 period:

1. 95% of the forfeited performance security will be returned.
2. 95% of the bid security will be returned.
3. 95% of the liquidated damages (LD) deducted will be refunded.
4. 95% of the risk purchase amount realized will be returned.
5. If a firm is debarred only on account of default in the execution of such contracts , such ban shall also be canceled by issuing appropriate orders by the procuring entity.

However , if a firm has been bypassed for appointment to a contract due to restrictions in the interim period (i.e. the date of ban under this order and the date of repeal), no claim shall lie .

6. No interest will be paid on such refund amount.

The relief will be provided in all contracts for the purchase of goods and services entered into by anyone , according to an office memorandum issued by the Department of Expenditure to Secretaries of all Ministries/Departments of the Government of India and Chief Secretaries/Administrators of Union Territories. Ministries/Departments/Attached or Subordinate Offices/Autonomous Bodies/Central Public Sector Enterprises (CPSEs)/Central Public Sector Banks/Financial Institutions etc. with MSMEs, which fulfill the following criteria

We do:

1. Registered as a medium , small or micro enterprise as per the relevant scheme of the Ministry of MSME on the date of claim by the supplier/contractor. MSME can be registered for any category of goods and services.
2. The original delivery period/completion period stipulated in the contract was between 19.02.2020 and 31.03.2022 (both dates inclusive).

Government e-Marketplace (GeM ) has created a dedicated web page to implement the scheme. Eligible claims will be settled through GeM only.