'Govt exploring support to small-scale unit' says Gadkari; discusses COVID's MSME impact

Union Minister Nitin Gadkari on Monday held a meeting with the members of the Calcutta Chamber of Commerce via video-conference on the impact of COVID-19 on MSMEs, as well as the measures to address the challenges. The minister stated that the government is exploring new financial lending institutions to support small-scale units. He further added that they are working towards strengthening the NBFCs that will help the small businesses to avail easy credit in the coming time.

According to the Union Minister, the MSME Ministry is working on two booklets to cover details about the last three year's export and import. Speaking about the special 'Aatmanirbhar Bharat' economic package announced by the Centre, Gadkari said that the measures will provide the required support to MSMEs to face the current economic challenges. He further informed that there has been restructuring of 6 lakh MSMEs till March 2020. According to him, the ministry is aiming to cover an additional 25 lakh units until December 2020. Meanwhile, the current contribution of MSMEs in export is 48 percent, which may be increased to 60 percent.

He further requested all the stakeholders to work in tandem and urged the industry to maintain a positive attitude to tide over the COVID-19 crisis. According to an official release, the minister also stressed on usage of masks, sanitizers, and maintaining social distancing.

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Announcement on MSMEs

As a part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi, 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.

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Further, there will be a 100 percent 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. 

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(With ANI Inputs)