Coimbatore: Covid-19 first wave outbreak pushed the entire Micro, Small and Medium Enterprises (MSME) to crisis.
Coimbatore: Covid-19 first wave outbreak pushed the entire Micro, Small and Medium Enterprises (MSME) to crisis.
In order to help the industrialists come out from the financial crunch, the central government distributed ₹2.5 lakh crores loan under Emergency Credit Guarantee Loan Scheme(ECGS) to the MSME sector. This helped the industrialists to avail additional 20% bank loans. But when the industrialists restarted the manufacturing process, within a few months again 'Covid-19' second wave outbreak came and due to which the industries were again closed down.
At present all the industries have started functioning, but it will take many months for all the industries to return back to normalcy, bur the bank loan burden continues to affect the industrialists. The loan amount given by the central government is also now added as an additional burden to all the entrepreneurs who have availed the loan under a special scheme which was implemented a year ago. Industrialists have requested the government to give handholding support to MSMEs for the next one year which alone will help the industries to come out from crisis.
'COWMA' Cluster services, President, Sastha M Raaja said, "Post pandemic outbreak the entire MSME industries sector is reeling under crisis. The loan support given by the central government helped the industrialists to get confidence. By the time all of them restarted the manufacturing process, 'Covid-19' second wave came and due to which all the industries were forced again to close. The impact caused by the second wave is more severe since the MSME industrialists are struggling hard to repay their bank loans."
"In fact the loan support provided by the central government has now become a new burden since the overall loan repayment has increased by another 20% . For example, if an industrialist who has already repaid a bank loan of Rs 10 lakh per month. After getting the central government loan his monthly bank loan repayment including the interest has added by Rs 2.5 lakhs. Hence he has to repay Rs 12.5 lakh loan each month. Things would have been normal and the financial position would also have been stronger if the 'Covid-19' second wave had not been witnessed.
But at present only now the industries are restarting their operations and hence the entrepreneurs are struggling hard to repay bank loans. Central government should give support by distributing financial assistance as 'Covid-19' Grant. Since the monsoon session of parliament has begun today we request the central government to give a special announcement which would give a big boost to the entire MSME sector."
Consortium of Indian Associations, Convenor, K.E.Raghunathan said, "Most of the industrialists were reeling under the crisis caused by the Covid pandemic first wave outbreak. In this situation, a pandemic second wave outbreak has added more financial burden on them. Many are struggling to repay the bank loans. The government should announce a 'SPECIAL STIMULUS PACKAGE' soon which should include these initiatives".
"All the MSME industries whose turnover is less than Rs 5 crores must be completely exempted from all types of revenue paid to the government such as taxes, ESI contributions, bank loans etc for the next one year. This will help the industrialists to come out from crisis, money rotation would increase and the price of the product would come down as a result of which the overall business would increase. Those who have not availed bank loans should be provided with 50% loans out of their operational cost during the past one year. There should be some concession also given for the interest on this bank loan. Government hand holding support is must for the MSME sector to come out from the crisis."