Ludhiana garment makers join hands to get dues

Small and medium garment manufacturers in Ludhiana

recently got together to form the MSME Garment Manufacturers Association of Ludhiana, to get their pending dues from customers. Forming the committee has served the purpose since most of them have been able to get their payments after they decided to take legal action against defaulters.

The association, with over 50 members, was formed in 2010 after the garment manufacturers – most of them in the small and medium category – decided that putting up a united front would be the most effective way to force buyers (big retail chains) who were deferring payments beyond what is allowed under the provisions of the MSME Development Act, 2006.

According to Chapter V, Section 15 of the MSME Development Act 2006, retail chains are liable to make payments to MSMEs within 45 days of receiving supplies. However, payments were being delayed for 30 to 300 days. The interest payable for the delayed period beyond 45 days under Section 16 of Chapter V was also being denied to MSME units. Remaining silent due to fear of losing business, most garment manufacturers in Ludhiana had to face payment delays by customers. But after the formation of MGMAL in 2010, things have improved slightly.

Negotiations are on with two retail chains, as their outstanding exceeds Rs 30 crores. However, now association members are less hesitant to take legal recourse. Members have got warrants issued against some alleged offenders. Formation of the association had helped to build awareness about MSME rights.