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29/05/2020 06:40am

44% MSMEs feel financial package failed to meet expectations: Survey

image 44% MSMEs feel financial package failed to meet expectations: Survey

New Delhi, May 29 (KNN) The COVID-19 pandemic has caused great economy distress affecting all the sectors from large corporates to Micro Small and Medium Enterprises (MSMEs).

As per the conducted by Skoch Consultancy Services in association with Federation of Indian Micro and Small & Medium Enterprises (FISME), Bhartiya Vitta Salahkar Samiti and Tax Law Educare Society, the non-availability of fund has forced MSME to cut down employee salaries and nearly two-third are resorting to layoffs.

''Over three-fourths of micro, small and medium enterprises (MSMEs) in the national capital region have cut employee salaries while nearly two-third are resorting to layoffs after seeing no rise in demand,'' said survey.

The survey further revealed that 44% of respondents said the relief measures announced by the government earlier this week did not meet expectations and 86% wanted direct cash support from the government.

The most immediate challenge for MSMEs remains paying salaries, discharging vendor bills, and meeting other fixed expenses, with around 77% of the surveyed businesses citing need for emergency funds, the survey said.

The survey was conducted among 200 members of FISME in the National Capital Region which sought response to the Atma Nirbhar Bharat package.

On the overall Atma Nirbhar Package cutting across all sectors, 32% respondents found it useful, 44% did not, the survey revealed.

The Finanace Minister had announced the Atma Nirbhar Bharat package earlier this month.

''The collateral free loans are for those with upto Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months, ‘’FM had said at a press conference.

Sitharaman also announced 100% credit guarantee cover to banks and Non-Banking Financial Corporation (NBFCs) on principal and interest which will benefit 45 lakh units.

She further said that the government will create a Fund of Fund to infuse Rs 50,000 crore as equity for MSMEs which are viable businesses and need hand holding.

She also said that in order to provide stressed MSMEs with equity support; government will facilitate the provision of Rs. 20,000 crores as subordinate debt.

"This will enable 45 lakh MSME units to resume business activity and also safeguard jobs," she added.

There was another positive news from the FM as she said that for government procurement, tenders up to Rs 200 crore will no longer be under global tender route. Earlier MSMEs, used to get disqualified and disallowed from participation.


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