Congress president Sonia Gandhi on Saturday repeated the demand for an immediate package for the micro, small and medium-scale enterprises, warning of devastating consequences if concerns about the economy were ignored while battling the pandemic.
Sonia asked Prime Minister Narendra Modi to announce a Rs 1 lakh crore “MSME wage protection” package without delay, arguing this would go a long way in shoring up crores of jobs, boosting morale and alleviating the predicted economic spiral.
She also demanded a credit guarantee fund of Rs 1 lakh crore to provide immediate liquidity to the sector and ensure adequate capital is available with the MSMEs.
These proposals have been worked out by a consultative group headed by Manmohan Singh.
“The MSMEs today contribute close to one-third of the nation’s GDP and account for almost 50 per cent of our exports. They employ over 11 crore people,” Sonia said in a letter to Modi.
“At this moment, without appropriate support, more than 6.3 crore MSMEs stand on the verge of economic ruin. Every single day of the lockdown comes at a cost of Rs 30,000 crore to the sector.”
Her letter added: “Nearly all MSMEs have lost sales orders, seen a complete cessation of their work, and have had their revenue negatively impacted by the lockdown. Most worrying of all, 11 crore employees are at risk of losing their jobs as MSMEs struggle to pay their wages and salaries.
“The government needs to introduce a series of measures to meet this crisis head on or risk a much larger economic crisis down the road.”
Sonia’s letter also said: “Actions taken by RBI must get reflected in actions by commercial banks to ensure adequate, easy and timely credit supply to MSMEs. Furthermore, any monetary action at the RBI’s end must be supported by sound fiscal support from the government.
“A 24x7 helpline in the ministry to provide guidance and to assist MSMEs during this period would also be of enormous value. These measures need to be supported by an expansion and extension of the RBI’s moratorium on payment of loans for MSMEs beyond the stipulated period of three months. The government should also explore a waiver/ reduction of taxes for MSMEs and other sector-specific measures.”
The Congress has argued that a policy of high-collateral security was leading to the denial of credit to MSMEs.
“(The) 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,” the party said.
It stressed that the delivery of justice was an essential service and asked the judiciary to come out with a plan to decide the issues of aggrieved people who are desperately waiting for the resolution of their disputes, stalled by the lockdown.
Party spokesperson Kapil Sibal said pragmatic plans were necessary also on the education and health sectors, which had suffered a lot because of the lockdown.