Across countries, delayed payment by governments to suppliers and contractors is treated as a routine administrative issue. But the data tells a different story: late public payments are a development problem, with measurable consequences for jobs, firm survival, infrastructure delivery, and trust in the state.

A European Commission study found that government-to-business delays imposed costs of up to 0.19% of GDP in some economies. In Brazil, over 50% of municipalities carried arrears to suppliers. In India, a 2023 MSME finance report estimated ₹10.7 lakh crore—about 7.8% of GDP—locked up in delayed payments, with 80% owed to micro and small enterprises.