TReDS Made Mandatory for CPSE Payments to MSMEs
Why in the news
The Government now requires every central public sector undertaking to clear its dues to small businesses through TReDS, rather than by other routes.
Key facts
- Ordered by: Ministry of MSME.
- Who must comply: all CPSEs (Central Public Sector Enterprises).
- Platform: Trade Receivables Discounting System (TReDS), used for MSME invoice settlement.
Significance
- Payments reach MSMEs on time.
- Dealings become more transparent.
- MSMEs get simpler access to working capital by discounting their invoices.
Exam angle
- Full form: Trade Receivables Discounting System.
- Nodal ministry in this decision: Ministry of MSME.
- Related terms: invoice discounting, working capital, CPSE.