FISME asks RBI to defer installment payments under emergency credit line guarantee scheme
The Emergency Credit Line Guarantee Scheme is the biggest fiscal component of the Rs 20-lakh crore Self-Reliant India Mission package announced by the government last year.
The Federation of Indian Micro and Small & Medium Enterprises (FISME) has suggested 10 measures to RBI, including deferring payment of installments under the Emergency Credit Line Guarantee Scheme (ECLGS), to help Micro, Small and Medium Enterprises (MSMEs) amid the coronavirus pandemic.
The Emergency Credit Line Guarantee Scheme is the biggest fiscal component of the Rs 20-lakh crore Self-Reliant India Mission package announced by the government last year.
"When it comes to the crunch, the first expense that is cut is payrolls. It is our humble prayer to RBI and the government, not to let an MSME close down until all efforts to save it have failed. The alternative is scary. Along with tens and thousands of these small establishments, lakhs of workers will come on the road," the federation said in a letter to RBI Governor Shaktikanta Das.
The suggestions include giving due weightage to the vintage of MSMEs and treat this period of the last three years as an exception, forgiving default; bearing the cost of payrolls and/or social security; suspend the practices of assigning NPAs based on straight-jacketed excel sheet based automated systems for COVID period, and deferring payment of installments under ECLGS.
Besides, it has recommended sanctioning term loans to firms whose CAPEX may have got stuck midway; relaxation of NPA, restructuring, and enhancement norms on a case-to-case basis.
"We also urge you to quickly create a task force with just the relevant stakeholders and the beneficiaries," FISME said.
It added that these suggestions could appear to be "too out of the box", but the stakes are too high to ignore any of these without due consideration.
Edited by Anju Narayanan