Union Finance Minister Nirmala Sitharaman’s explanation on the Rs 20 lakh crore fiscal stimulus announced by Prime Minister Narendra Modi, has been received with cheers by businesses across the country.
Expressing hope for a revival of the economy, industry representatives welcomed the six measures announced by the Finance Minister for MSME sector that targeted meeting the immediate as well as longer term requirements of the sector.
Welcoming the measures announced by the Finance Minister, Sharad Kumar Saraf, president, FIEO, said that both fiscal and non-fiscal measures besides various reform measures announced are much-needed booster dose for the economy during such difficult and testing times when global economies are facing the brunt with major disruptions in supply chains across the world due to Covid-19 pandemic.
The FIEO chief stated that Rs three lakh crore collateral-free automatic loans have been provided to MSME units with Rs 100 crore turnover for 4-year term with a moratorium of 12 months will benefit 45 lakh units across the country. Besides provisioning of Rs 20,000 crore as subordinate debt for stressed MSMEs will benefit 2 lakh units and expansion of MSME definition based on turnover and investment has also been provided in this package.
“Further infusion of Rs 50,000 crore equity into MSMEs as fund of funds along with non allowance of global tenders upto Rs 200 crore are some of the steps towards self reliance, which will also help the MSMEs to increase their business. All these initiatives will help in making these MSME units not only competitive but will also support them in becoming global brands,” added Saraf.
The Confederation of Indian Industries (CII), in a statement, has said that the most important announcement with long-term implications is the quantum jump in definition of MSME, which had not been changed since the MSME Development Act of 2006 was introduced and was long awaited.
Further, with the decision to not have global tenders for government procurement up to Rs 200 crore, the redefinition will assist the MSME sector to grow and emerge as a vibrant and dynamic sector, contributing to self-reliance and employment in a big way, the statement read.
CII stated, “the FM has introduced a prudent and calibrated set of measures that promises to stabilise the conditions after the Corona virus crisis.”
Simon George, president, Cargill India, while speaking about the economic stimulus announced by the Finance Minister, said, “It is encouraging to see the details of the economic stimulus announced by the Finance Minister today. We can see a two -pronged initiative from the government, addressing both demand and supply side simultaneously to revive the economy. On the demand side, reduction in provident fund contribution and tax cuts to non-salaried (self -employed professionals) will put more cash in the hands of end-consumers. This should trigger a surge in demand. On the supply side, support announced for MSMEs is a positive step as they are badly hurt by the demand disruption.”
He added, “Allowing better access to credit and support of government benefits will help them restart production and supply goods in the market. We look forward to finer details in the next few days on more incentives planned to provide an impetus to the industry.”
In a similar vein, Dr Varun Chaudhary, executive director, CG Corp Global (makers of Wai Wai noodles), stated, “It’s a definite direction towards giving impetus to Indian entrepreneurs to come forward and participate in the industrial growth journey of the country. This will also encourage Foreign Direct Investment in India by global entrepreneurs thereby making India a big manufacturing hub.
CG Foods has always been aligned to the ‘Make in India’ initiative and has a strong manufacturing foot print strategically spread from North to South India to cater to the local markets. Chaudhary pointed out, “We have resumed manufacturing in all our seven plants. We have been able to up our production to 50% of our capacity and growing by the day. We are looking at launching new variants and categories and eagerly looking forward to continue participating in India's journey of becoming self reliant.”
Meanwhile traders’ body, the Confederation of All India Traders (CAIT) while reacting to the economic relief package announced by the Union Finance Minister to the MSME sector, said that the announcements will make the economy stand up even before it goes to death bed and the economy will start coming back on track with infusion of liquidity in the market.