Vivad se Vishwas scheme

Why is in news? Claims of more than 10,000 MSMEs accepted under Vivad se Vishwas-I scheme since launch

In a major relief to the Micro, Small and Medium Enterprises (MSMEs), various Ministries/ Departments of Government of India have accepted more than 10,000 claims of MSMEs under Vivad se Vishwas - I scheme aimed at providing relief to MSMEs for the COVID-19 Pandemic period.

This has led to grant of more than Rs. 256 crore to MSMEs and increased flow of bank credit through freeing up of guarantees.

The highest relief of Rs. 116.47 crore has been granted by the Ministry of Petroleum and Natural Gas (MoPNG). This includes the claims settled and amount paid by the agencies under the administrative control of the MoPNG.

About:

The "Vivad se Vishwas I - Relief to MSMEs" scheme has been launched by the Department of Expenditure, Ministry of Finance, to provide relief to Micro, Small and Medium Enterprises (MSMEs) during the COVID-19 period.

The scheme was announced in the Union Budget 2023-24.

Objectives:

Provide relief to the micro, small and medium enterprises (MSMEs) that have been affected by the COVID-19 pandemic.

To resolve pending tax disputes and reduce litigation.

Key Provisions:

It offers a one-time opportunity for MSMEs to settle their pending tax disputes by paying only the disputed tax amount and getting a waiver of interest and penalty.

It provides immunity from any future prosecution or penalty for the settled cases.

The scheme is applicable for all tax disputes pending as on 31st March 2023, irrespective of the stage of litigation.

Significance:

Benefit MSMEs that are struggling with cash flow problems due to the Covid-19 pandemic and the economic slowdown.

Reducing the pendency of tax litigation and improving the ease of doing business in India.

Support the MSME sector, which is considered the backbone of the Indian economy. The sector contributes about 30% of the GDP, 45% of the exports and employs over 11 crore people.

The scheme is part of a Comprehensive approach; the Government has also taken various other measures to help MSMEs such as providing collateral-free loans, revising the definition of MSMEs, creating a dedicated portal for MSME registration and grievance redressal, etc.