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.