Credit and Finance for MSMEs: Nitin Gadkari said that the government has made some decisions to help MSMEs grow in the post-Covid scenario such as increasing their working capital limit by 20 per cent.
Credit and Finance for MSMEs: MSME Minister Nitin Gadkari on Thursday said that the government is expecting restructuring of 25 lakh MSME loan accounts by December this year up from 6 lakh till March 31 – over 300 per cent increase. The minister added that the government has made some decisions to help MSMEs grow in the post-Covid scenario such as increasing their working capital limit by 20 per cent. “We have also deferred (loan) repayments for three months. We have told many things to the government like ensuring immediate income tax and GST returns for (bringing) liquidity into MSMEs. We have also asked for the dues stuck in NHAI and other government departments to be released soon. Unless there is liquidity, the economic wheel won’t move,” Gadkari told the members of Indore Management Association in a webinar.
According to the Reserve Bank of India (RBI), as per the Nayak Committee Report, the working capital limits to small scale industries (SSI) units is computed on the basis of at least 20 per cent of their estimated turnover up to the credit limit of Rs 5 crore. The RBI in its monetary policy review meeting in February this year had announced extending the debt restructuring scheme window to December 31, 2020, without an asset classification downgrade to MSMEs that were in default as on January 1, 2020.
Gadkari, in another webinar with the members of the Society of Indian Automobile Manufacturers (SIAM) Institute, urged to pay pending MSME dues within a month’s time given small businesses have been fighting “battle for their survival”. “Please be positive about this sector as it is on the verge of collapse. Now it is a very important thing if you can help them, within a month if you can give their payment it will be good,” he added. The minister in a webinar with Assocham last month had said that the government is looking at setting up a revolving fund of Rs one lakh crore to boost liquidity into MSMEs by banks under the credit guarantee scheme.