While COVID-19 has still taken the entire economy under its grip, economic advocacy platforms and industry associations are coming forward with a unanimous appeal to ensure pro-MSME policy framework.
India’s leading industry body, FICCI came forward with a list of demands and appealed policymakers to consider following points in order to bring back the MSMEs which are considered as the backbone of the economy in bringing back the growth path of Indian Economy.
- Interest-free and collateral-free loans are given to MSME companies (turnover of less than Rs 500 crores) for a period of upto 12 months depending on the sector to enable them to cover fixed costs, salaries and other operational expenses; for non-GST paying companies, an alternate mechanism may be worked out (based on IT filing).
- This loan can be given with pre-conditions that businesses will continue to run & there would be no layoffs of workers and after one year it will be converted into a grant if all conditions are met (threshold tax collection could be one metric).
- Given complete breakdown of businesses there is a need to assess the situation and if required extend the timeline for loan moratorium.
- Provide greater regulatory forbearance including change in NPA definition and loan restructuring etc. NPA recognition period to be extended from 90 days to a minimum of 360 days.
- All tax payments including GST payments should be deferred by six months without inviting any penalty.
- Bank Guarantees should not be encashed (all industries under Force Majeure); an extension of minimum 6 Months to be given. This should also be extended to stressed asset funds.