On Saturday, Wayanad MP Rahul Gandhi accused the BJP-led NDA government of "actively destroying" the economy by not providing cash assistance to the people and Micro, Small and Medium Enterprises (MSMEs) and also termed it as "Demon 2.0."
The Congress leader, who has made several statements attacking the central government on its approach in dealing with the COVID-19 crisis, took to Twitter once again to express his opinion.
"Government is actively destroying our economy by refusing to give cash support to people and MSMEs. This is Demon 2.0," he tweeted.
Govt is actively destroying our economy by refusing to give cash support to people and MSMEs.— Rahul Gandhi (@RahulGandhi) June 6, 2020
This is Demon 2.0.https://t.co/mWs1e0g3up
He has also previously urged the government to provide Rs 7,500 cash assistance to the vulnerable sections for six months across the country.
His remarks come in the backdrop of the cash crunch faced by MSMEs due to the nationwide lockdown and COVID-19 outbreak, making it difficult to even cover operational expenses like paying salary, rent and purchasing raw material. MSMEs are important to the Indian economy as the sector not only makes a large contribution to the GDP but help generate employment in smaller cities.
The central government had announced an Emergency Credit Line Guarantee Scheme (ECLGS) as part of its COVID-19 relief 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.
According to Finance Minister Nirmala Sitharaman's tweet on 1 June, public sector banks sanctioned loans worth Rs 3,200 crore through the Emergency Credit Line Guarantee Scheme in a single day. However, media reports covering statements from MSMEs say that the amount of sanctioned loans are yet to be disbursed, delaying business orders. These firms are also facing reluctance from banks who are insisting on documents or collateral.
On Friday, repaying 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 to the ministry regarding such delay.