Finance Minister Nirmala Sitharaman unveiled the first set of measures on Wednesday as part of the government’s economic package, to support workers and businesses struck by the nationwide lockdown to curb the coronavirus pandemic. This came a day after Prime Minister Narendra Modi announced monetary and fiscal support of Rs 20 lakh crore to revive an economy already struggling with slowing expansion even before the COVID-19 pandemic. As part of her announcements, the finance minister spelt out plans to provide liquidity support to the small and medium enterprises to the extent of Rs 4.5 lakh crore.
“That included collateral-free loans – also known as unsecured loans – worth Rs 3 lakh crore for MSMEs with turnover up to Rs 100 crore, a move likely to benefit 45 lakh businesses by October 31,” Finance Minister Nirmala Sitharaman had said.
Here is a reaction to the Finance Minister’s proposals for the MSME sector
FISME Secretary General Anil Bhardwaj told NDTV, “The Finance Minister has so far addressed only one demand of the three core demands MSMEs had put before the Govt. The Finance Minister has announced a 3-lakh crore collateral-free loan scheme, but there is no announcement on paying salaries of around 12 crore workers during the lockdown or any Interest Subvention Scheme for MSMEs.”
The Federation of Indian Micro, Small and Medium Enterprises (FISME) had made the following demands to the government: a) The government should make arrangements for paying salaries of around 12 crore workers during the lockdown period through Employee State Insurance Corporation. b) The government should announce an interest subvention on existing loans taken by MSMEs to give them relief, and c) The government should facilitate flow of new loans by banks, by creating a Credit Guarantee Fund as banks are hesitating to give new loans to MSMEs during the crisis period.