The government last week eased the provisions of the Vivad se Vishwas scheme, which was announced in the Union Budget 2023-24, with an objective to give relief to Covid-hit Micro, Small and Medium Enterprises (MSMEs) in case of their failure to execute contracts during the pandemic period. This scheme has been operationalized from April 17 and will remain open for applications till June 30.

Under the scheme, pending recoveries of performance security, bid security and liquidated damages forfeited/ deducted from MSMEs will be slashed by 95%. In an official statement last week, the Finance Ministry added that in case any firm has been debarred only due to default in execution of such contracts, such debarment shall also be revoked and no interest shall be paid on the refunded amount.

Relief will be provided to all MSMEs which entered into contract with "any Ministry/ Department/ attached or subordinate office/ autonomous body/ Central Public Sector Enterprise (CPSE)/ Central Public Sector Banks/ Financial Institution etc." for goods and services. Also, the provisions will be applicable only when original delivery period/ completion period stipulated in contract was between February 19, 2020 and March 31, 2022.