FOCIA requests fine tuning of Covid 2021 financial relief measures to MSMEs
Coimbatore: Federation of Coimbatore Industrial Associations (FOCIA) issued a press release stating that while the Covid 2021 financial aids will certainly boost their confidence, they also felt that these measures can help them tide over the pandemic damages only if certain riders are removed and additional liberal allocations are infused.
Waiver of Penalties on Dishonoured EMIs
The precarious situation of the micro and small industries can easily be understood from the data given by National Automation Clearing House (NACH). Out of 8.57 crores auto debit transactions scheduled during April 2021, 2.92 crores transactions (34 percentbounced and during May 2021, the same increased to 36 percent. The recent statement by a bank official reveals that out of new NPAs added during April and May 2021, 60 percent are from MSMEs and the increase is almost twice the normal occurrence. FOCIA is thus requesting the Finance Minister to instruct the banks and NBFCs to waive all the penalties leviable on bounced EMIs during these two months.
Withdraw the riders in ECLGS and ensure 10 percent facility to all MSMEs
FOCIA welcomes the Government’s decision to increase the total allocation to Rs. 4.5 lakh crores under ECLGS 1.0 (from existing Rs. 3 lakh crores). But unlike the initial ECLGS implemented during 2020, RBI has now given a free hand to lending institutions to decide the eligible beneficiaries of the enhanced ECLGS. The foreign banks like Standard Chartered Bank have chosen not to extend the 10 percent loan facility under ECLGS. Many private sector banks are very selective in preparing the list of beneficiaries and have dropped many customers. FOCIA is requesting the Government to eliminate all these riders and ensure 10 percent loan facility by instructing banks to extend the new benefit to all willing borrowers, in micro and small sectors, irrespective of their present financial status.
New loans to micro units; Additional allocation requested
"We are thankful to the Central Government for announcing a separate Covid relief to micro units. Under this scheme, new loans upto Rs.1.25 lakhs are available, for fresh and existing borrowers. But the allocated Rs.7500 crores will not be sufficient. To cover the targeted 25 lakh small borrowers, at least Rs.31250 crores will be required. Moreover, 25 lakhs limit will benefit only a meagre 4.2 percent of total 6 crore micro units in India. We request the Honourable Finance Minister to liberally increase the allocation for this scheme, in order to cover the vast contingent of micro sector units, who are in danger of being left out of any benefit, once again this year," requested FOCIA.