NEW DELHI: India’s Finance Minister Nirmala Sitharaman in a recent advisory to the country’s Central Public Sector Enterprises (CPSE) said that all dues owing to vendors, suppliers and partners should be cleared by coming October 15. The move, however, is one of the ways to facilitate economic growth. But the state-controlled telecom operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have a severe cash crunch that has led to even nonpayment of salaries to MTNL’s 22,000 employees for the last two months, and BSNL’s staff wage disbursal has been dragged thrice in last three quarters.
Clixxo Broadband, a micro, small and medium enterprise (MSME) which has been thriving majorly on the business from BSNL, is finding it hard to pay wages to its workforce for the last few months and had to shut a couple of its branch office locations recently.
In a letter to Sitharaman, the company’s top executive Pankaj Singhal said that vendor-partners of India’s fourth-largest telco should be given assurance since the situation has worsened with the survival of smaller firms even becoming a challenge.
Here is the letter’s full version:
30 September 2019
The Hon’ble Minister for Finance,
Government of India,
Let me start by congratulating you and the government of having taken a brave step to not only reduce taxes and encourage investment but also directing various government departments and Central Public Sector Enterprises to clear all MSME dues by 15th October 2019.
Amongst these CPSE’s is also an ailing entity i.e. Bharat Sanchar Nigam Limited (BSNL) of which we are one of the MSME Vendors. We sincerely hope that your directions shall be heeded by them as well, however, the predicament lies in the fact that they have no money. These directions should also be covered by some kind of insurance and should not merely be public statements with no consequences.
Madam, we are a small enterprise which has invested crores with BSNL to provide services to their enterprise customers such as various state assemblies, PSU’s and Large Enterprises. We invoice approximately Rs. 9.25 crores per annum to BSNL and our principal outstanding as on date is more than Rs. 5.75 Crores which is close to 7.5 months of outstanding. How would you perceive a small MSME enterprise to even survive in such an environment?
It is a matter of fact that of the total of 1943 complaints by MSME undertakings against Central PSU 1143 pertain to BSNL alone, with no voices being raised in the Government to look into it.
We had somehow been dragging ourselves in the hope of a revival and rejuvenation package being considered by the Govt. of India to BSNL which also has been seemingly struck down by your ministry.
In the aforesaid circumstances, we fail to understand how we can get our monies from BSNL. In fact, a reference made in this regard to the office of Hon’ble Prime Minister through Centralised Public Grievance Redress and Monitoring System has elicited the following reply from BSNL-
“In this connection, it is informed that the funds are delayed due to general financial stress in BSNL, efforts are being made by BSNL to resolve the issue. However, the fund with reference to the demand raised by the different Circles will be released as per the availability of cash inflow.”
The aforesaid statement is saying as if Payable when able, if unable not payable. Does this auger well for a CPSE which is owned 100% by Government of India wherein MSME & Other Companies have invested well beyond their capacities as they had perceived that this debt can never die?
More so we are in deep trouble due to this non-payment from BSNL as defaults on statutory dues pertaining to GST, TDS, PF, and ESIC etc. are mounting and various departments hounding us seeking punitive action. It is really a precarious situation with one arm of the government not paying and the other one is arm twisting us.
We are further burdened by the fact that no bank is willing to lend any further monies to us as we are associated with BSNL.
Madam, in case the government is really serious in rejuvenating the economy and more importantly the MSME sector then it should look within and find an immediate solution by funding these institutions at least for paying outstanding bills of MSME organisations. In fact, the government (including its institutions) is the single largest debtor of the MSME segment which will die sooner than later in the present situation.
Thanking you in anticipation,
Clixxo Broadband Private Limited