Chidambaram questions Sitharaman & Gadkari on MSMEs, asks them to 'settle their accounts'

The Congress on Friday took a dig at the Centre government by highlighting contradictory statements made by the Finance Minister Nirmala Sitharaman and Union Minister Nitin Gadkari on the condition of MSMEs (micro, small and medium enterprises) in the country.

Former Finance Minister P. Chidambaram pointed out that MSME Minister Nitin Gadkari said that government agencies owed MSMEs Rs 5 lakh crore in unpaid dues. He further highlighted that in another statement the Finance Minister Nirmala Sitharaman on Wednesday announced Rs 3 lakh crores in collateral-free loans for 45 lakh MSMEs. "So, who is the lender and who is the borrower?" he questioned.

Taking to Twitter Chidbambaram said "Minister Nitin Gadkari says that governments and PSUs owe Rs 5 lakh crore as unpaid dues to MSMEs and Minister Sitharaman says she will offer collateral-free loan of Rs 3 lakh crore to MSMEs (numbering 45 lakhs). So, who is the lender and who is the borrower?!"

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The former finance minister further asked them to settle down their accounts. He said: "Will the two ministers 'settle their accounts' first and let MSMEs save themselves without government's 'help'?"

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FM announces collateral-free automatic loans 

On Wednesday Finance Minister Nirmala Sitharaman announced collateral-free automatic loans for businesses, including MSMEs of up to Rs 3 lakh crore. Under this initiative, borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover would be eligible for the special collateral-free loan. This loan will have a 4-year tenure with a moratorium of 12 months on principal repayment and the interest will be capped.

There will be a 100 per cent credit guarantee cover to banks and NBFCs on principal and interest. The initiative can be availed till October 31, 2020, and no guarantee fee and fresh collateral would be required. 45 lakh units can resume business activity and safeguard jobs on the back of the scheme. This decision comes as a part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday.

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