The central government is likely to announce a relief package for micro, small and medium enterprises (MSMEs) that have been affected due to the coronavirus lockdown, Union MSME Minister Nitin Gadkari said on Saturday. He said that the financial package is expected to be announced in due course.
"We have sent recommendations for a relief package to the Finance Minister and Prime Minister, and I hope it will be announced soon," Gadkari said while addressing a webinar in New Delhi today.
He urged Indian industries to have a positive attitude and asked them to adopt an integrated approach to overcome the crisis while ensuring the lives and livelihood of people.
Referring to the economic crisis across the world, Gadkari said that it is a golden opportunity for Indian industries and entrepreneurs to explore new businesses. He suggested that Indian Inc must adopt technological innovation and import substitution to attract investments from global businesses that look to exit China.
Interacting with members of the FICCI Ladies Organisation (FLO) in a webinar, the minister expressed confidence that 25 lakh MSMEs will be restructured by the end of the year.
Last week, during an interaction with the representatives of Associated Chambers of Commerce of India (ASSOCHAM) on impact of COVID-19 on MSMEs, Gadkari had said that the government was working on a dedicated fund to address delayed payments of MSMEs.
"We have prepared a fund of Rs 1 lakh crore and government will pay for the insurance. We will fix a formula on how to coordinate between all 3 stakeholders - the one who has to receive money, the one who has to pay money, and bank," Gadkari had said. The fund will provide some relief to the MSME sector to tide over the negative impact of novel coronavirus-related disruption in their businesses and revenue losses. The corpus will be a mobile fund that will help increase liquidity in the market, he said.
MSMEs contribute to 29 per cent of GDP in the country and employ over 11 crore people.
On April 17, the Reserve Bank of India (RBI) did try to ease the liquidity crisis among MSMEs by announcing a targeted long-term repo operations (TLTRO) of Rs 50,000 crore to help small and medium-sized non-banking finance companies (NBFCs) and micro-finance institutions (MFIs).
By Chitranjan Kumar