As per the decision, the emergency credit line will be accorded to MSMEs from banks and NBFCs up to 20% of entire outstanding credit as on February 29, 2020.
Garment exporters from India’s largest cluster Tirupur have sought inclusion of MSMEs having credit outstanding of more than Rs 25 crore to avail emergency credit line from banks.
Tirupur Exporters’ Association (TEA) would like to thank Union finance minister Nirmala Sitharaman for laying out comprehensive vision to spur growth and become self-reliant India with a focus on Aatma Nirbhar Bharat package vision and also for further upward revision of MSME definition.
As per the decision, the emergency credit line will be accorded to MSMEs from banks and NBFCs up to 20% of entire outstanding credit as on February 29, 2020 and borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover being eligible.
To note that further to upward revision of MSME definition, more number of knitwear garment exporting units in Tirupur will fit into the definition of MSME and now the concern is that due to the stipulated condition, some of the MSME units’ whose credit exposure is more than Rs 25 crore are deprived of receiving the emergency credit line fund, as their outstanding exceeds Rs 25 crore, said Raja M Shanmugham, president, TEA.
“We wish to note at this juncture that the real intension of the government to extend support to all MSMEs to bailout from the impact of Covid-19 pandemic need to get redressed.
“More importantly, we would like to drive home the point that as the Covid-19 impact caused to the MSMEs irrespective of industry is severe, crippled the economy and the announcement of revival measures by the Union finance minister would certainly help to bail them out of the crisis and also for ease of doing business.
“At the same time, it is increasingly becoming necessary to extend liquidity support to the non included MSMEs also, having credit exposure more than Rs 25 crore, mainly to bring them back to operationalise their units to the normalcy level, do exports and continue to provide employment,” he said.