GeM to impose penal interest on ministries for payment delay
A functionality enabling public procurement portal GeM to impose penal interest for making delayed payments to vendors by government ministries and departments will be operational in July, a senior official said on Tuesday.
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New Delhi: A functionality enabling public procurement portal GeM to impose penal interest for making delayed payments to vendors by government ministries and departments will be operational in July, a senior official said on Tuesday.
In 2020, the government decided to levy a 1 per cent penalty on government departments and agencies for delayed payments to vendors selling goods on the GeM platform. The provision would be effective from July, a senior official said on Tuesday. Government e-Market (GeM) CEO PK Singh said that “there are issues pertaining to getting timely payments from buyers, particularly state governments. In case of the central government, the payments by enlarge happen in 10-15 days. There are problems in case of state governments.
“We are working on that and let me tell you that by the end of July, this functionality for imposing the penal interest will be up and running. Interests will be charged from October,” Singh said here at CII MSME Growth Summit.
This provision would act as a deterrent for departments not to take time in making payments. The Government e-Market (GeM) portal was launched on August 9, 2016, by the Commerce Ministry for online purchases of goods and services by all the central government ministries and departments.
