The Hindu Business Line : ‘Stimulus package may boost MSMEs’

New Delhi, March 22 The Confederation of Indian Industry (CII) claims the first stimulus packages announced by the Government will have a beneficial impact for the Micro, Small & Medium Enterprises (MSMEs).

The CII conducted a snap poll to analyse the impact of various initiatives announced as part of the first and second stimulus packages. It claims respondents were happiest about the 4 per cent reduction in CENVAT; 87.5 per cent thought it would benefit all sectors. Three-fourths of respondents also agreed that the additional plan expenditure of Rs 20,000 crore would benefit all sectors.

The direction to public sector enterprises and Government departments to pay promptly to MSMEs and the RBI’s steps to ease liquidity by reducing repo and reverse repo rates was received with equal enthusiasm.

Only half of the respondents, however, believed that the extension of the credit guarantee from Rs 50 lakh to a crore would benefit the MSME sector. The response to the MSME sector refinance facility of Rs 7,000 crore was similar.

More than half of CII’s polled respondents weren’t sure of the benefits related to the measures taken with regard to NBFC, announced in the second series of packages.

Fifty per cent weren’t sure if the auto sector ancillary SMES would really benefit from public sectors banks being asked to provide credit to non-banking financial companies (NBFC) for purchase of commercial vehicles.

The announcement of the Rs 25,000 crore liquidity support to NBFC was also welcomed by 25 per cent of the respondents; 62.5 per cent were unsure of its benefits to the SMEs.

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