New Delhi: As the nation is continuing it's fight against Corona virus pandemic, Congress President Sonia Gandhi seeks urgent attention and intervention of Prime Minister Narendra Modi over the financial crisis of MSME sector, while highlighting the economic concerns through her letter.
Congress Chief mentioned in her letter that Micro, Small and Medium Scale Enterprises (MSME) contributes close to one third of the nation's GDP and account for almost 50% of exports. The sector employee over 11 crore people.
While expressing the plight of MSMEs, she said, "At this moment, without appropriate support, more than 6.3 crore MSMEs stand at the verge of economic ruin. Every single day of the lockdown comes at a cost of Rs 30,000 crores to the sector. Nearly all MSMEs have lost sales order, seen a complete cessation of their work and have had their revenue negatively impacted by the lockdown. The most worrying of all, the 11 crore employees are at risk of losing their jobs as MSMEs struggle to pay their wages and salaries."
She suggested a series of measures to Center to over this crisis. She urged the Government to announce a Rs 1 lakh crore "MSME Wage Protection" package to shore up jobs and to alleviate the predicted economic spiral.
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Gandhi asked the Government to establish and deploy a credit guarantee fund of Rs 1 lakh crore, as a necessary measure to provide immediate liquidity to the Sector and to ensure adequate capital is available to MSMEs at this time of crisis.
She further stated, "Actions taken by RBI must get reflected in actions by commercial banks to ensure adequate easy and timely credit supply to MSMEs. Furthermore, any monetary action at RBI's end must be supported by sound fiscal support from the government. A 24×7 helpline in the Ministry should be provided for guidance and to assist MSMEs during this period, would also be of enormous value."
CPP Chief also asserted upon the need of a support over these measures by an expansion and extension of RBI's Moratorium on payment of loan for MSMEs beyond the stipulated period of 3 months. She said that the government should also explore waiver of taxes for MSMEs and other sector specific measures.
"High Collateral security is leading to denial of credit. Same is the case with limits on 'margin money' been extremely high. These factors combine to ensure a lack of access to available credit for MSMEs and must be addressed," she added.
Sonia Gandhi ensured the Center for continued constructive support from the side of Congress party, and asked the Government to ensure the revival and strengthening of MSMEs which has been acknowledged as the "backbone of the economy".
