Nitin Gadkari, Minister of Road Transport and Highways and MSMEs, said that Indian industry including MSMEs should convert this crisis into an opportunity, accelerate infrastructure projects and win this war against Corona to achieve economic growth.
Addressing FICCI's National Executive Committee Meeting via video conferencing, Mr Gadkari said, "Given the current dismal standing of China in the global market, the Indian industry including MSMEs should look at the current situation as a blessing in disguise." He added that this is the time when India can capture export market as countries like Japan and USA are withdrawing from China.
Mr Gadkari suggested that exports from India can be increased by reducing cost of power, capital and logistics. "Utilize water ways for exports for reducing transport cost," he said.
Talking of MSMEs Mr Gadkari said that in this economic crisis that has arisen due to COVID 19 pandemic, it is important to protect MSMEs which contributes 29% in India's economy. The Minister indicated that a decision has been taken to increase the limits for defining of MSMEs which will further increase the coverage of MSMEs. "An announcement in this regard will be made in next few days," he said.
He mentioned about enhancing the purchasing power of the individuals and increasing the liquidity in the market. Mr Gadkari stated that dues of MSMEs at central and state level will be released at the earliest and urged the private sector to clear the dues of MSMEs. He estimated that Rs 40,000-50,000 crore could be injected in the market by releasing the due payments.
On one of suggestions from FICCI, Mr Gadkari said that credit against pending payment on the basis of 3 years' GST and bank record may be considered. He also appreciated FICCI's suggestion to use ESI fund to pay the labourers from un-organised sectors on a temporary basis and agreed to consider it.
In response to a FICCI suggestion of collateral and interest free loan to MSMEs, Mr Gadkari said that Ministry of MSME has already taken 75% guarantee to loans by banks to MSEs worth Rs 1 lakh crore by paying 1.5% premium and banks only have to take 25% collateral. However, the Ministry is putting efforts to further reduce this from 25%.
He stated that Ministry is aiming to increase the purview from Rs 1 lakh crore to Rs 5 lakh crore, in consultation with Finance Ministry. With respect to interest free loans, he assured to discuss it with Finance Ministry. However, he added that the industry cannot overcome this crisis if banks and government collapse, hence the need of the hour is to take care of each other.