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Govt's Atmanibhar Package Is Yet To Reach MSMEs

By Staff
|

According to a survey conducted by the All India Manufacturers Organisation (AIMO), over 78 percent of the 60 million MSMEs (Micro, Small and Medium Enterprises) and 83 percent of the self-employed have expressed unhappiness about the COVID-19 related economic package announced by the Finance Ministry.

Those surveyed said that while the amount and relaxations announced are believed to be more than sufficient, they have not seen the direct benefits of it in the last three weeks despite their many visits to the bank.

Govt's Atmanibhar Package Is Yet To Reach MSMEs
 

AIMO conducted a nation-wide survey in association with D4E and other trade bodies to understand the opinions of 46,525 respondents on the action taken by the central government for the revival of the economy, particularly MSME.

"It is apparent from the survey the Rs 3.50 lakh crore package is 'adequate' for the MSME sector. But, the methodology of allocation and mechanics of implementation are still unclear among those surveyed," said Kenny Ramanand, honorary general secretary, AIMO.

Each day of delay in disbursing cash to MSMEs can cause undue financial stress, halting basic requirements like payment of salaries and procurement of raw material.

The central government had announced an Emergency Credit Line Guarantee Scheme (ECLGS) as part of its COVID-19 relief package or Atmanibhar Bharat Package wherein 100% collateral-free loans of up to Rs 3 lakh crore were to be disbursed to MSMEs via banks and NBFCs.

Amount extended as credit under ECLGS to a business/MSME will be up to 20 percent of total outstanding as on 29 February 2020.

Recently, Rashtriya Swayamsevak Sangh (RSS)-affiliate Laghu Udyog Bharati (LUB) informed Finance Minister Nirmala Sitharaman that many firms are complaining that for these "pre-approved" ECLGS loans, banks, especially private banks, prefer those with higher annual sales.

A ground survey will be carried out to find out if banks are following the government's directive in letter and spirit.

 

Last week, responding to a related question during a webinar organised by the Merchants Chamber of Committee and Industry, Anurag Thakur, Union Minister of State for Finance and Corporate Affairs, said that banks would face "corrective actions" if they create unwanted hurdles or delays in disbursals and asked MSMEs report to the ministry regarding such delay.

Firms have complained that banks are insisting on documents or collateral.

Further, a month after the announcement by the ministry that banks would provide subordinate-debt to promoters of stressed MSMEs, up to 15 percent of their existing stake in the unit subject to a maximum of Rs 75 lakh, the scheme is yet to take off as the Reserve Bank of India (RBI) has not issued guidelines for the scheme yet, a Hindu report said. The ministry said that the scheme was estimated to help two lakh stressed MSMEs.

Read more about: msme msmes sme
Story first published: Tuesday, June 9, 2020, 14:50 [IST]
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