THIS CAN BECOME ANOTHER RTI KIND OF REVOLUTIONARY IDEA AS THIS WILL GIVE TOOL IN THE HAND OF HONEST BUSINESSES TO PROTECT THEIR INTEREST AND CORRUPTION WILL ALSO REDUCE.

Context

Research says that 96 % of companies shut down their business within 10 years (80% within a year and 90% within 5 years). Single biggest reason for closure is that they don't get paid in time. No party or government has ever paid attention to biggest pain point of businesses that is to ensure that their payments are released in time by clients/customers.

Opportunity

This is a global phenomenon that companies get shut down so if any government puts in place the measures to ensure that payments of entrepreneurs are protected and released in time, It will change the complete face of corporate India. It will embrace entrepreneurship. Lot of people don't take courage because of horror stories on companies closing down because of this very reason.

Reasons

1. Corruption i.e. expectation of bribe by officers approving payments 2. Lack of funds 3. Complacency and laid back working of government officials 4. Payment is genuinely not due to vendor for right reasons.

I think first 3 reasons together constitute 80-90% of delays and can be addressed by measures suggested below.

What should be done?

A) A web based system to be developed for tracking status for any payment with following rules embedded in the system.

- Limit number of approvers on any payment.

- Limit no. of days an approver can keep any file with him/her. Say 2 days. Once this period expires, an automated reminder should go to him and his next level of approver.

- If lack of fund is reason for not releasing the payment, It should be mentioned.

Generally, government officers try to find lot of other issues in the payment while the fact is that they don't have finds to release the payment and they don't want to admit this.

B) Payment tribunal to be set up

There should be forum in every government department where vendor can raise his complaint on delayed payments. CM of every state and concerned minister should review the output of cases raised in these tribunal every 3 months.

C) Sensitization drive for government officers and employees on this issue that country will not prosper till the time businesses are treated well and in a fair way.

By Gunjan Tripathi