TReDS for Faster Payments

The concerns raised by the Indian Chamber of Commerce, Jammu Chapter, over delayed payments to MSME suppliers under Ayushman Bharat deserve prompt and serious attention. The issue is not limited to pending bills. It directly affects the financial health of small businesses that support hospitals, supply essential goods and services, and help keep the public healthcare system functioning smoothly across Jammu and Kashmir.

Ayushman Bharat has played an important role in widening access to cashless treatment and reducing the financial burden on patients. Its success, however, also depends on the strength of the supply chain behind it. Hospitals cannot function efficiently without timely availability of medicines, equipment, consumables and other essential inputs. When suppliers are forced to wait for long periods for legitimate payments, the strain ultimately begins to affect the system they are expected to support. MSMEs are particularly vulnerable to such delays. Most operate with limited working capital and tight financial margins. They have to pay manufacturers, banks, employees, transporters and other business partners on time, even when their own receivables remain blocked. Prolonged payment cycles can therefore turn a routine commercial transaction into a serious survival challenge. The proposal made by ICC Jammu Chairman Rahul Sahai for the use of the Trade Receivables Discounting System, or TReDS, merits careful consideration. If eligible receivables are brought onto the platform after proper acceptance and verification, MSMEs could access funds earlier instead of waiting indefinitely for payment. This can reduce dependence on expensive borrowing and provide businesses with greater financial stability. The suggestion for a transparent First-In-First-Out payment system is equally sensible. Bills should ideally be cleared according to their date of acceptance unless there is a genuine dispute or deficiency. A clear and visible sequence of payment would reduce uncertainty and help prevent allegations of selective or uneven treatment. Suppliers should not be left guessing for months about when their dues will be released. At the same time, the matter requires more than sympathy. Administrative delays that repeatedly push legitimate payments into long pendency should be examined and corrected. If invoices are valid, verified and accepted, there should be a defined timeline for settlement. Small vendors cannot be expected to finance a public healthcare system from their own pockets for an indefinite period. The issue of vendor transition also needs fairness. When one supplier is replaced by another, legitimate liabilities of the previous vendor should not disappear from the system. Businesses that have already fulfilled their contractual obligations must receive what is due to them. Any other approach would weaken confidence in public procurement and discourage reliable suppliers from participating in government-supported schemes. There is also a strong case for a dedicated grievance-redressal mechanism. Suppliers facing delayed or disputed payments should have access to a clear institutional channel where cases can be tracked and resolved within a reasonable period. Endless correspondence and repeated visits to offices serve neither business interests nor administrative efficiency. The State Health Agency should also take up the issue of timely release of Jammu and Kashmir’s due share of funds with the concerned authorities wherever funding gaps are contributing to delayed payments. Financial bottlenecks at one level should not be allowed to pass unchecked down the chain until they become a burden on small businesses. TReDS alone will not solve every payment problem. Proper invoice verification, accountability at hospital level, timely fund flow and disciplined financial management will remain essential. But the platform can become part of a broader reform that brings speed, transparency and predictability into the system.

The administration should therefore treat the ICC proposal as an opportunity to strengthen both MSMEs and Ayushman Bharat. Timely payments are not a concession to vendors. They are a basic requirement of sound financial governance. A healthcare system that depends on private suppliers must ensure that those suppliers are not pushed into distress for simply doing their job. Protecting their liquidity ultimately protects the continuity, credibility and effectiveness of public healthcare itself.