Congress president Sonia Gandhi
Congress president Sonia Gandhi

Sonia draws PM Modi's attention to plight of MSMEs, seeks measures for their revival

ANI | Updated: Apr 25, 2020 19:42 IST

New Delhi [India], April 25 (ANI): Congress president Sonia Gandhi on Saturday wrote to Prime Minister Narendra Modi, drawing his "immediate attention and intervention" towards the condition of Micro, Small and Medium Scale Enterprises (MSMEs) in the country during the lockdown period and also suggested measures to ensure their revival.
"MSMEs 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. At this moment, without appropriate support, more than 6.3 crore MSMEs stand on the verge of economic ruin," she wrote in the letter.
"Every single day of the lockdown comes at a cost of Rs 30,000 crore to the sector. 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, the 11 crore employees mentioned in the preceding paragraph are at risk of losing their jobs as MSMEs struggle to pay their wages and salaries," she further stated in the letter.
The Congress president has urged the Central government to introduce a "series of measures to meet this crisis head-on or risk a much large economic crisis down the road."
Gandhi has also hinted at possible steps that can be taken to deal with the impending crisis, which includes announcing a Rs 1 lakh crore "MSME Wage Protection" package, which would help in shoring up jobs, boosting morale.
The second suggestion is to establish and deploy a credit guarantee fund of Rs 1 lakh crore, to "provide immediate liquidity to the sector and ensure adequate capital is available to MSMEs at a time when they need it the most."
The other measures suggested by her include ensuring commercial banks to provide adequate, easy and timely credit supply to MSMEs, setting up a 24/7 helpline in the ministry to assist the industries from the sector, and an "expansion and extension of RBI's moratorium on payment of loans for MSME beyond the stipulated period of three months."
Lastly, the Congress chief has said that "high collateral security is leading to a denial of credit and similarly, the "limits on margin money being extremely high."
Gandhi ended the letter with a plea stating, "The government has acknowledged MSMEs to be the backbone of our economy. It is time it takes measures to ensure the revival and strengthening of that backbone. This is a case where timely and decisive action can make all the difference."
In the letter, Gandhi also assured the Centre of Congress' continued constructive support in the fight against COVID-19, which has hit 24,942 people and killed 779 people so far. (ANI)