Coronavirus economic impact: CII sets up a fund for MSMEs
The Confederation of Indian Industry (CII) is setting up a fund to assist rehabilitation of small enterprises and Micro, Small & Medium Enterprises.
Parul March 27, 2020
MORE IN News
Due to the novel coronavirus (Covid-19) outbreak, the economy is on a toll, to curb the crisis, the Confederation of Indian Industry (CII) is setting up a fund to assist rehabilitation of small enterprises and Micro, Small & Medium Enterprises (MSMEs). The MSME sector is one of the most severely affected as steps to curtail the outbreak such as travel bans, closure of malls, theatres and educational institutions have led to widespread disruptions in economic activity. This, in turn, has hampered the small businesses.
As per reports, the confederation is likely to request all its members (mainly corporates) to contribute an amount from their CSR allocation for the fund, CII COVID Rehabilitation and Relief Fund (CRR).
Shreekant Somany, Chairman, CII National Council on MSME, said, “Multiple actions need to be taken on extension of bank loans, a special fund, steps regarding filing of GST and improving welfare of workers. CII stands ready to support MSME sector in this hour of need through the CII CRR.”
In fact, the CII has requested for additional ad-hoc sanction of working capital to the tune of 25 per cent of sanctioned limit as relief measure. The industry body also suggested deferment of Equated Monthly Installments (EMIs) and interest rate on working capital as well.
Setting up of a special MSME Factoring Fund to enable MSMEs to discount their bills to approved retailers in 15 days and permit retailers to pay in 120 days would help in faster realisation, the official statement added.
Creating a corpus by the government to help MSMEs tide over the crisis would help them pay wages. Extension of non-performing asset norms cases to 150 days from the present 90 days and if required by industry, ad-hoc limits to an extent of 25 per cent of sanctioned limits may be allowed by banks on SOS basis to overcome temporary liquidity crunch, would also provide temporary relief, the statement read.
The Confederation has proposed that the government should draw up contingency plans for three periods – till March 31; for next two months till May 31 and then for next 2 months till July 31.