Coimbatore: "Due to COVID-19 virus outbreak and the subsequent lockdown, the MSME sector which employs a large section of all kinds of labourers including migrant workers are facing severe financial crisis and bleak future. The industry is financially crippled without any concrete revival package from the Government", Pollachi MP K. Shanmuga Sundaram wrote to Union Finance Minister, Nirmala Sitharaman urging the revival and rehabilitation of the MSME Sector.
Coimbatore: "Due to COVID-19 virus outbreak and the subsequent lockdown, the MSME sector which employs a large section of all kinds of labourers including migrant workers are facing severe financial crisis and bleak future. The industry is financially crippled without any concrete revival package from the Government", Pollachi MP K. Shanmuga Sundaram wrote to Union Finance Minister, Nirmala Sitharaman urging the revival and rehabilitation of the MSME Sector.
In his letter, he highlighted how the MSMEs provide employment to around 120 million people and contribute to around 45% of the overall exports from India. Suggesting a few options to help the sector, he hoped that the Central Government would take it into consideration thereby helping the sector revive.
With around 63.4 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities, as well as 33.4% of India's manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India, he highlighted in his letter.
He submitted a certain proposal for the consideration of the Central Government which is feasible in the purview of the Government.
To increase the liquidity in the hands of the MSME sector, he requested the government to direct the bankers to grant interest free working capital sanctioned in the form of term loan, with a holiday period of 12 months and repayable in 36 months instalments, under specified terms and conditions:
* For the existing borrowers to the extent of 20% on the Loans' outstanding balance, without insisting for additional security
* For the new borrowers 20% on their GST turnover, with the available security, say Plant and Machinery with insurance
COVERAGE
*For the new borrowers, having turnover below the GST limits, 20% on their Declared Turnover, with the available security, say Plant and Machinery with insurance coverage
*Terms and conditions may include the compliance of Income tax filing for the accounting year 2018-19 and GST Returns up to month of February 2020.
*Deferring of GST payment, contribution to EPF, ESI for one year to have sufficient recycling of this amount for better growth.
He concluded by hoping that the Finance Minister would take into consideration the suggestions mentioned above for the revival of the MSME sector.