Sonia Gandhi writes to PM Modi, seeks economic package for revival of MSMEs
NEW DELHI : Congress president Sonia Gandhi on Saturday urged Prime Minister Narendra Modi to announce a financial package for the revival of the MSME sector, saying if ignored, the problem can have a devastating and expansive ripple effect on the country’s economy.
In a letter to PM Modi, Sonia made five-point suggestions for the revival of the Micro, Small and Medium Enterprises (MSME), which is reeling under the adverse impact of the coronavirus lockdown.She said, MSMEs contribute close to one-third to India’s Gross Domestic Product (GDP) and account for almost 50 per cent of the country’s exports.
The sector also employs over 11 crore people. But the lockdown necessitated by the COVID-19 pandemic has put most economic activities to a halt and over 6.3 crore MSMEs “stand on the verge of economic ruin”, Mrs Gandhi said in the letter.
First, announce a Rs 1 lakh crore ‘MSME Wage Protection’ package, which would help in shoring up these jobs, boosting morale as well as alleviating the predicted economic spiral. Second, establish and deploy a credit guarantee fund of Rs 1 lakh crore, in order to provide immediate liquidity to the sector. Third, action taken by RBI must get reflected in actions by commercial banks to ensure adequate, easy and timely credit supply to MSMEs.
Fourth, these measures need to be supported by expansion and extension of the RBI’s moratorium on payment of loans for MSME beyond the stipulated period of 3 months. The government should also explore a wave in the reduction of taxes for MSMEs and other sector-specific measures.
Fifth, high collateral security is leading to denial of credit. Same is the case with limits on margin money being extremely high. These factors combine to ensure a lack of access to available credit for MSMEs and must be addressed.
Highlighting the crisis, Sonia said MSME sector is suffering around Rs 30,000 crore loss every day due to the lockdown and efforts should be made to help revive them as they are the backbone of the economy. “If ignored, this issue has the potential of having a devastating and expansive ripple effect on our economy,” she said in the letter.
She also added that as the nation continues to fight against COVIDd-19, it essential to highlight an economic concern that needs immediate attention and intervention.
Meanwhile, Union Minister Prakash Javadekar said the Congress was “playing politics” at a time when the country is going through a difficult phase. “At a time when the country is going through a tough phase and the people are working with the Prime Minister, the Congress is playing politics, writing letters everyday.
