FICCI suggests measures to govt for MSMEs
New Delhi, Mar 24 (KNN) In order to ensure health safety of Micro, Small and Medium Enterprises (MSMEs) workforce amid coronavirus outbreak, Federation of Indian Chambers of Commerce & Industry (FICCI) has suggested a slew of measures to the government.
''It is extremely important to ensure the flow of money into the working capital of such enterprises otherwise there will be a risk to the survival of these enterprises," FICCI said in its report on Monday.
FICCI in its suggestion urged the government to clear all pending dues including GST refunds to MSMEs at the earliest, interest rate subvention at 3 per cent instead of 2 per cent on loans that are healthy and not NPAs etc.
FICCI also sought that all the receivables of MSMEs either from the government or from third parties should be converted into one-year commercial paper to be subscribed by banks under special refinancing window of RBI.
''MoF, through RBI, should give directive to the Banks for continued support to SME sector, especially service sector, for automatic renewal for a year of credit limit sanctions being processed from March onwards, till present scenario improves, without change in commercial terms,'' the body further suggested.
The other suggestions of the FICCI are: SEBI to issue Advisory to the Rating Agencies not to downgrade SME sector from March onwards, till present scenario improves. Those downgraded by one notch, should be restored to original ratings, which should be reassessed after one year. In UK, authorities have agreed to consider the rating just before the COVID impact, Provide a Wage Subsidy to MSMEs, especially in the Manufacturing sector, to the extent of 50 per cent for all registered workers for a period of 9 months, Cash grant be provided to small businesses (like in Australia). In UK also small businesses will be provided with a one-time grant of 10000 Pounds to meet the ongoing business costs.
In lockdown situation, MSMEs will be the worst sufferers if the lockdown continues for a longer duration in wake of the Coronavirus epidemic. A large number of MSMEs could incur business losses and also face severe cash flow disruption, which in all likelihood will have an adverse effect on the livelihood of several people working in this sector.