Ease of Doing Business for MSMEs: National MSME body, Federation of Indian Micro and Small & Medium Enterprises (FISME) in a meeting with the Commerce Minister Piyush Goyal on Thursday raised three key concerns risking the survival of micro and small enterprises in the country. In the video conference, also attended by industry associations such as CII, FICCI, Nasscom, ACMA, SIAM etc. to assess the current situation in different industries impacted by the Covid-19 outbreak, FISME highlighted the acute financial crisis faced by the MSME sector amid lockdown and overall situation in the country. MoS Som Parkash, and officers of the ministry were also present in the e-meeting.
“The first problem we raised was around MSMEs’ inability to give salaries to their employees. They were somehow able to pay for March but since April is affected due to the lockdown, paying salaries to employees is a serious concern. The second problem we discussed was about the fixed electricity charges to be paid by businesses every month over and above the energy charges. MSMEs’ factories are shut under lockdown but they are forced to pay the amount. In some industries, the amount is crippling,” Anil Bhardwaj, Secretary-General, FISME told Financial Express Online. For instance, in Delhi as per FY20 tariff, the fixed charges set by the Delhi Electricity Regulatory Commission for industrial and non-domestic connections are Rs 250 per kilo volts-amperes per month while energy charges are Rs 6-7.75 per kilo volts-amperes hours.
“Third concern we raised was monthly bank loan EMIs. The three-month moratorium is not of much help as it simply extends the period. In fact, it has increased concern for MSMEs,” added Bhardwaj. The Reserve Bank of India had recently prescribed three-month moratorium by banks on loan repayment. MSMEs suggested that while this might be a breather for them but this would remain a burden for them as they would have to pay the three-month EMI later as their loan tenure would extend by three months.
Bhardwaj said the minister assured the industries including MSMEs of solving the existing challenges and conveying the same to the group of ministers. However, according to a statement by the Commerce Ministry on Thursday said that the minister called upon the industry to have a calibrated and rational approach to the problem by evolving protocols and procedures which will help them in improving their productivity and efficiency, without compromising on the health security of their employees and other stakeholders. “I think we should start talking more practical instead of making wish lists,” the statement added citing Goyal as saying.