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Coronavirus-hit MSMEs, exporters to get relief package

MSME sector representatives had last Saturday sought government help for payment of salaries saying they would not be able to disburse salaries and retain staff

Nirbhay Kumar | April 1, 2020 | Updated 20:09 IST
Coronavirus-hit MSMEs, exporters to get relief package

  • Hard pressed for liquidity, MSMEs are finding it difficult to pay salaries and wages
  • MSME exporters not receiving payments as buyers are in bad shape and demand is very low
  • Partial waiver of fixed electricity charges, support in salary payment to workers and interest subvention are key relief proposals
  • MSME Ministry has sent suggestions to Finance Ministry after consulting industry
  • April expected to be worrying for the MSME sector

Reeling under coronavirus crisis, exporters and MSMEs could expect interim financial relief with government readying a package for the two key sectors.

Among the proposals under consideration are part-waiver of fixed electricity charges, support in salary payment to workers and interest subvention.

"After consulting the industry we have compiled the suggestions and sent it to Finance Ministry. The proposals are being discussed and would be announced at the earliest," said a Micro, Small and Medium Enterprises (MSME) ministry official.

In the meeting with Commerce Minister Piyush Goyal, the MSME sector representatives had last Saturday sought government help for payment of salaries saying they would not be able to disburse salaries and retain staff in absence of government support.

An official said that the MSMEs have conveyed that they have been paying workers' salaries for the month of March, the real challenge would come in April.

"April would be quite worrying as 15 days have already been washed out and work would not start immediately after the lockdown is lifted," executive of a Gurgaon-based firm said.

Financial support to the MSMEs and the export sector is important as the two sectors employ a substantial number of people. Many industry executives feel that the support offered by the government and the RBI so far may not be sufficient to provide liquidity.

"The MSME firms generally don't have much cash reserves and their credit limits are also small," said an industry executive.

Given that the salary date has already hit and pressure to pay March salaries to workers on time continues, the MSMEs are under huge strain and want the government to come out with emergency relief measures.

Also Read: RBI announces more measures to deal with coronavirus fallout

Also Read: India's fiscal deficit may shoot to 6.2% in FY21, says Fitch Solutions

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