Urged PM Modi to release all payments pending from PSUs to MSMEs: Gadkari
Union Minister for Micro, Small and Medium Enterprises (MSMEs) Nitin Jairam Gadkari said he has urged Prime Minister Narendra Modi to take steps to ensure release of all payments pending from various departments of the government, including public sector undertaking (PSUs) and Central government undertakings, to the MSMEs. This will bring liquidity in the market, he said.
The minister also said that he is in the middle of formulating a scheme of Rs 1 lakh crore to help MSMEs get their pending payments.
The ministry which is trying to bring some respite to the MSMEs, which are the backbone of the economy, by implementing some relaxation measures for domestic manufacturers said that imposing a lockdown has given rise to many issues.
Gadkari urged Indian factories to provide food and shelter facilities to the workers in the factory premises. He also added that 50 to 60 percent of the national highways in India have been opened.
Gadkari urged people to continue wearing masks while stepping out of their homes, use hand sanitisers and practice social distancing. He was addressing a webinar organised by Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Liquidity Capitalis one of the immediate concerns for MSMEs that needs the attention of policy-makers. With fixed costs such as salaries and rentals in place, this segment is crying for increased liquidity in the market.
Addressing the concern, Gadkari said, "Without liquidity, the growth of our economy will not accelerate," adding, "I have urged the Prime Minister to facilitate release of all payments pending from various departments of the government including by public sector undertaking (PSUs) and Central government undertakings. This will bring liquidity in the market."
The minister also shared with the representatives of ASSOCHAM that he is in the middle of formulating a scheme of Rs 1 lakh crore to help MSMEs get their pending payments.
He said, "We have decided to set up a fund of Rs 1 lakh crore. We will insure this fund and the government will pay the premium. We will come up with a formula for sharing of the interest burden between the paying entity and payment-receiving entity and banks against this fund," he said.
Besides talking about issues to combat liquidity crisis, Gadkari also noted how the MSME ministry is working to resolve several issues such as GST. Niranjan Hiranandani, President of ASSOCHAM, has asked for a 50 percent sabbatical on GST for the next six months across the board to provide a stimulus to the demand side of the economy.
Gadkari said, "I am in discussion with the finance ministry to quicken the process of giving refunds on GST and income tax and release payments in the next eight days."
He also said it is important to review whether banks are implementing recommendations made by the Reserve Bank of India (RBI).
A blessing in disguise
Gadkari labelled the coronavirus situation as a "blessing in disguise" as the world has turned against China which is set to become an economic superpower. "This is the biggest opportunity for India."
He said that organisations working for MSMEs must 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.
While countries like Taiwan, Vietnam, Indonesia, and other Asian countries have benefitted from the world's declining dependence on China for the supply of raw materials, India is yet to exploit and make use of this opportunity.