Chennai: Almost close to one month after Finance Minister Nirmala Sitharaman’s announcement of special economic package for MSMEs to tide over Covid-19 crisis, not many companies have been benefited by it.
It is said that only a handful of public sector banks have received the guidelines and most of the private banks have no clue about it. Many companies, it is learnt, are not able to avail the loans as the guidelines are not clear about to how to get and repay it.
“These relief measures were announced to ensure that the companies recover from the losses incured due to the Covid 19. However after 20 days, even proper guidelines have not been framed yet. What should have been done on an emergency basis is being carried out leisurely. This is a huge blow to many small and medium scale firms which have run out of business. If the situation continues to be the same, many companies have to shutdown as there might be no chance of recovering,” said Kavitha, an entrepreneur.
“When I approached a private bank to avail the loan, to my shock they said that they were yet to get proper guidelines about the scheme and will not be able to disburse the loans. If it takes such a long time even to frame the guidelines, one can only imagine how long will it take for the loan to be processed and sanctioned. A new month has begun and one more month of commitment has been added to the company and the employees, but still there is no relief for us. Many countries are even giving subsidies to companies to give employees their salaries. We are not even expecting such things. It would be better if the announced loan is processed and made available at the right time,” said Vimalan Jacob, another businessman.
Based on a survey conducted by All India Manufacturers Organisation (AIMO), the association’s former president K E Raghunathan said, “we received about 46,525 responses for our survey. The most striking aspect was that 35 per cent of MSMEs and 37 per cent of the self employed respondents said that they see no chance of recovery in their business.”
On 13 May, Nirmala Sitharaman unveiled a slew of measures for MSMEs as part of the economic package to counter Covid-19 outbreak, which included Rs three lakh crore collateral-free automatic loans for small businesses and two separate funds to provide equity support.
It is said that the Rs three lakh crore worth of loans can be availed by existing borrowers with upto Rs 25 crore outstanding, and Rs 100 crore turnover. The fresh loan amount can be up to 20 per cent of a company’s outstanding.