Vivad Se Vishwas 2.0: Doors Reopen for COVID-Hit MSMEs to Resolve Contractual Issues with Government Agencies

The Indian government has extended a significant financial relief effort for Micro, Small, and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic through the “Vivad Se Vishwas I” scheme. This move, announced as part of the Union Budget 2023-24, represents a concerted effort to support a sector crucial to the Indian economy, which has faced considerable challenges due to the pandemic.

Overview of the “Vivad Se Vishwas I” Scheme

  1. Initial Launch and Purpose: The scheme was initially launched in April 2023. It was designed to address disputes involving MSMEs and government contracts, providing a mechanism for resolving these issues amicably.
  2. Claims Settlement and Scope: By the beginning of December 2023, the scheme had successfully resolved about 44,000 cases, amounting to a settlement of approximately ₹650 crore. This demonstrates the scheme’s significant impact on resolving disputes for MSMEs.

Extension and Expansion of the Scheme

  1. New Submission Window: Recognizing the need for further support, the government has reopened the scheme for new claims from January 1, 2024, to March 31, 2024. This extension allows more MSMEs to benefit from the scheme.
  2. Reasons for Extension: The extension was primarily due to a lack of awareness about the scheme among eligible MSMEs, leading to many not being able to lodge their claims in time.

Additional Relief Measures

  1. Vivad Se Vishwas II: Alongside the first scheme, a second scheme, “Vivad Se Vishwas II,” was also implemented, focusing on resolving pending contractual disputes. This scheme has also seen substantial traction, with over 900 claims worth ₹20,000 crore received and ₹1,652 crore settled by mid-December 2023.
  2. Refund Provisions: The relief includes refunding 95% of the performance and bid security forfeited due to failure in executing contracts during the COVID-19 period.
  3. Revocation of Debarment: Firms that were debarred solely due to default in contract execution during the pandemic will have their debarment revoked.

Eligibility and Application Process

  1. Eligibility Criteria: To be eligible, firms must be registered as MSMEs as of March 31, 2022. The contracts in question should have had a delivery or completion period between February 19, 2020, and March 31, 2022.
  2. Application Through GeM: The Government e-Marketplace (GeM) has a dedicated page for the scheme, ensuring an efficient claim process.

Impact and Significance

  • Sectoral Support: The MSME sector is a pivotal part of the Indian economy, contributing significantly to employment and GDP. These relief measures are vital for sustaining this sector, which was hit hard by the pandemic.
  • Economic Recovery Post-COVID: This initiative is part of a broader government strategy to stimulate economic recovery following the disruptions caused by the pandemic.


The “Vivad Se Vishwas” schemes reflect the Indian government’s commitment to supporting MSMEs during a challenging economic period. By extending financial relief and resolving contractual disputes, these initiatives aim to stabilize and invigorate a key sector of the economy, aiding in the broader recovery process from the COVID-19 pandemic.



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