Coronavirus: Gadkari says govt seriously considering another financial package

Union Minister Nitin Gadkari on Thursday said the government was seriously considering unveiling another financial package for sectors hit by the coronavirus pandemic, soon.

In the meanwhile, Gadkari said the finance minister should expedite the processing of tax refunds to MSMEs and businesses, "anyhow", within eight days, to ease the liquidity crunch plaguing the community right now.

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In a video conference, he also urged major industries to release their outstanding dues to MSMEs within a month, saying the sector was engaged in a "battle for their survival".

The minister noted that the pendency of dues owed to MSME units by the central government, state governments, public sector undertakings and major industries was "very high".

"My request to all of you, as members of major industries, if it is possible for you to, at any cost, release the payment within a month. Don't take more time than that otherwise the situation is very bad," he said in an interaction via video-conference with the members of SIAM Institute.

The minister said he was trying to introduce a scheme envisaging setting up of a "rolling fund", where the interest cost on the payments due to MSMEs shall be borne either by the supplier or the purchasing industry. The move is expected to help put MSMEs in a stronger working capital situation.

Last month, the government had announced a Rs 1 lakh crore fund to repay outstanding payments to MSMEs owed by the central and state government undertakings as well as major industries.

The MSME sector's coffers have been running dry ever since the lockdown was announced in March. The pandemic is expected to hit the Indian economy with about $320 billion in terms of daily gross domestic product (GDP) loss, after 40 days of lockdown, a report entitled "COVID-19 Startup Impact Report -- Threats & Opportunities For The Indian Economy," said.

Acknowledging that this is a tough time for everyone, Gadkari encouraged industries to keep a positive outlook, and tap any opportunities that may arise after the COVID-19 pandemic is over.

He also pushed organisations working for MSMEs to prepare a data of companies working with China so that Indian companies can leverage this situation to reach out to these foreign companies and urge them to set up businesses in India so that domestic manufacturers can benefit.

A special focus towards export enhancement is the need of the hour, he said, highlighting the need to focus on import substitution to replace imports with domestic production.

Gadkari further added that Japan has offered a special package to its industries for taking out Japanese investments from China and moving elsewhere. He opined that the current scenario is an opportunity for India which should be grabbed.

Issues highlighted by industry participants included increasing provision of 10 percent of working capital limit as additional funds to 30 percent, benefit for labourers infected by COVID-19, relaxation in labour laws, deferring GST and advance tax, among others.

Gadkari assured the representatives of all possible help from the government. The minister said he would take up the issues with related departments.

(Disclaimer: Additional background information has been added to this PTI copy for context.)