In a major relief to Micro, Small and Medium Enterprises (MSMEs), the Centre has issued an order to the Ministries to refund performance security, bid security and liquidated damages forfeited, deducted during the Covid-19 pandemic. The order issued by the Finance Ministry is a follow-up to the “Vivad se Vishwas-I” scheme announced in the budget speech 2023-24 by Union Finance Minister Nirmala Sitharaman.
Ms Sitharaman in her speech announced that in cases of failure by 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 Government and Government undertakings. She said, this will provide relief to MSMEs. Ministry of Finance in a statement said that the pandemic had a huge adverse impact on the MSMEs as they faced many difficulties.
The ministry said that 95 per cent of the performance security forfeited from such firms shall be refunded. It added that 95 per cent of the bid security if any, forfeited from MSME firms in tenders opened between 19th February 2020 and 31st March 2022 will be refunded.
