Credit and Finance for MSMEs: The government may soon provide much-needed relief to the MSME sector through a financial package -- among the key demands from MSMEs to tide over current liquidity and cash flow challenges due to the Covid-19 lockdown.
Credit and Finance for MSMEs: The government may soon provide much-needed relief to the MSME sector through a financial package that has been among the key demands from MSMEs to tide over current liquidity and cash flow challenges due to the Covid-19 lockdown. MSME Minister Nitin Gadkari in a webinar on Saturday said that the government is likely to announce a relief package for the MSME sector soon. “We have sent recommendations for a relief package to the Finance Minister and Prime Minister and I hope it will be announced soon. We will try to give relief to the extent possible,” the minister said addressing the e-event organized by the FICCI Ladies Organisation.
The minister urged businesses for an “integrated approach” to tackle Covid crisis and leverage it to explore new business opportunities. Gadkari had earlier encouraged overseas Indian students as well to participate in India’s response to Covid-19 challenge through opportunities in multiple areas of research, innovation, management, medicine, higher education etc.
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74 per cent small businesses and startups are looking at shutting or scaling down their ventures in the coming six months battered and bruised by Covid, according to a LocalCircles survey last month receiving 13,970 responses. Moreover, 47 per cent respondents claimed to have less than one month of cash left while 24 per cent said that they had one-three months of capital available and 23 per cent had three-six months of cash.
Gadkari asked small businesses to continue to focus on innovation, entrepreneurship, science and technology, research skill and experiences to “convert the knowledge into wealth.” The minister also suggested a reduction in costs to remain competitive. To provide MSMEs with their dues pending with government buyers for as much as three-four month, the minister had in March raised concern saying that “MSMEs are on the verge of collapse. Passing a legislation is easy…. There are 20,000-22,000 cases. As per my estimates, big industrialists, state government, central government undertakings owe Rs 5.5 lakh crore to Rs 6 lakh crore to small industries,” PTI had cited Gadkari as saying in the Rajya Sabha. Meanwhile, from existing around 6 lakh restructured MSME loan accounts, the minister had said that the government will soon restructure additional 1 lakh MSMEs.