‘Centre’s, RBI’s stand in SC on loans is a big blow to MSMEs’

The Consortium of Indian Associations termed as a ‘big blow’ to micro, small and medium-sized enterprises (MSMEs) the RBI’s affidavit in the Supreme Court pleading for vacating its stay order on the classification of NPA and the Centre ruling out further relief measures under the loan moratorium scheme.

Consortium convener K.E. Raghunathan appealed to the Prime Minister to intervene and protect the interests of MSMEs. In a statement, he said, “The lockdown was implemented suddenly in national interest and it was extended for nearly six months for which MSMEs are not responsible.”

He pointed out that uncertainty abounds over the next six months of business activity and that MSMEs continued to pay for fixed costs though revenue has been eluding the sector for the last six months.

Earlier, the consortium had suggested several measures to the Centre.

Mr. Raghunathan said an estimated ₹3.5 lakh crore were due to MSMEs from large industries, PSUs, SPSUs and central/State governments. These, he said, should be paid immediately. He also appealed to the Centre to waive income tax for the current year for those earning less than ₹15 lakh. “This will spur middle-income individuals to spend, kindling demand.”

He also suggested that small enterprises with turnover of less than ₹5 crore be exempted from collection or levy of GST till March. “This will help them offer competitive prices. This move alone can bring down end prices by 18%.”

He urged the States and the Centre to spend at least 75% of their budgeted procurements for FY21 before December 2020 to boost order books and create job opportunities.

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