Chennai: As part of its ‘Save MSME Campaign’, a consortium of 25 MSME associations has urged the government to widen coverage of the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme and classify distressed units as fully dead, near dead, critically injured, minor impacted and no impact establishments, for targeted policy interventions.
According to K E Raghunathan, convener of the Consortium of MSME associations, “Those who are dead need honourable exit, those who are near dead require ventilator support. General treatment or solution can only be a First Aid and cannot yield permanent solution.”
The consortium has submitted various suggestions to the Prime Minister’s Office and government departments.
Terming the Emergency Credit Line Guarantee scheme a ‘non-starter’, the consortium said only about 10 per cent of disbursal has been achieved as on date. The scheme was unveiled by Finance Minister Nirmala Sitharaman over a month ago.
The consortium proposed to halve the income tax rates to 15 per cent for proprietors and partnership firms to help them tide over the Covid-19 crisis. They have also suggested a goods and services tax (GST) exemption to small enterprises with up to Rs 5 crore annual sales.
The associations have proposed to halve the income tax rates to 15 per cent for proprietors and partnership firms to help them survive the Covid crisis. They have also suggested goods and services tax (GST) exemption to small enterprises with upto Rs 5 crore annual sales.
The group of MSMEs claimed that only 10 per cent disbursals have taken place so far under ECLGS announced by Finance Minister Nirmala Sitharaman over a month ago.
The consortium proposed to change the eligibility criteria for collateral-free loans to cover all the firms that had not been classified as non-performing assets (NPAs) by banks as on 22 March, 2020.
It also suggested that the emergency credit should be offered without banks insisting for additional documents. “This will help those who need money to avail it at this crucial juncture,” Raghunathan said.
“Many associations fear, there will be a huge loss of employers in the coming days if demand is not created. It is suggested to immediately exempt from levy of GST for companies doing upto Rs. 5 crore turn over (mostly micro units ) till March 2021,” said Rajata Mehra of AMUSIA Industries Association, Lucknow.
“There is an immediate need and concern for Exemption from PF and ESI from all establishments till 31 December, 2020,” said Sanjeev Sikka , representing All India Rubber Industries Association.
“It is requested not to decriminalise cheque bouncing charge as that is the only day to day mechanism under use by MSME both with supplier and with customers and the fear of being punished, has made this become accepted mechanism of doing business,” according to Mayank Shukla, president of Chamber of Small Industry Associations (COSIA), Vidharba chapter.