Ease of Doing Business for MSMEs: MSME minister Nitin Gadkari has urged micro, small and medium enterprises to consider the current crisis as an opportunity instead of a challenge to grow. “India should take the war against pandemic COVID-19 as a blessing in disguise and consider it as an opportunity to rise further,” Gadkari said in a webinar organized by PHD Chamber on Wednesday. This comes a day after he called upon the industry to leverage the current situation to attract investment as “some countries are looking to move away from their investments from China, and India can be one of the best options for them,” he had told representatives from industry association FICCI on Tuesday.
The minister also informed that the government will soon restructure additional 1 lakh MSMEs up from around 6 lakh MSMEs restructured till March 21, 2020. According to the data from the Ministry of Finance, as per the one-time restructuring exercise permitted by the RBI of existing loans to GST-registered MSMEs without any downgrade in their asset classification, over 6 lakh MSME loan accounts were restructured by the public sector banks as on January 31, 2020.
The minister had last month had raised concern over the delay in payments for goods purchased by MSMEs from government organisations for as much as three-four months. “MSMEs are on the verge of collapse. Passing a legislation is easy…. There are 20,000-22,000 cases. As per my estimates, big industrialists, state government, central government undertakings owe Rs 5.5 lakh crore to Rs 6 lakh crore to small industries,” PTI cited Gadkari as saying in the Rajya Sabha.
In order to ease the liquidity crisis for MSMEs reeling under the current lockdown and Coronavirus crisis, the minister had on Tuesday said that he is looking into increasing the amount for credit guarantee to MSME sector from about Rs 1 lakh crore currently to Rs 5 lakh crore “wherein 75 per cent of the advances granted by financial institutions are guaranteed under the Credit Guarantee scheme of the government,” the MSME Ministry said in a statement. Under the Credit Guarantee Fund Scheme for MSMEs, the guarantee cover provided to MSMEs is up to 75 per cent of the maximum loan amount of Rs 50 lakh, 85 per cent for loans up to Rs 5 lakh to micro-enterprises, 80 per cent for micro and small enterprises owned by women and all loans to units in Northeast region