Tamilnadu Chamber of Commerce and Industry, Madurai has sought wide ranging fiscal incentives from the banking regulator, the Central and State Government for resuscitating the critically beleaguered MSME and retail trade sectors.
Stating that the MSMEs are staring at a bleak future in the aftermath of Covid-19 lockdown, the senior president of the Chamber S Rethinavelu said millions of people who depend on this sector do not have the means or facility to endure the present situation any more. Post lockdown, when the establishments are reopened, they apprehend more trouble as the stocks may not be saleable/out-dated, machineries that have remained idle for weeks in a row might need to be serviced or overhauled before recommencing production, resulting in huge expenditure.
While this would be unavoidable, the pressure to pay rent, EB charges and wages for the lockdown period, insurance and loan dues could add more strain to their troubled state.
To relieve the MSMEs from such acute stress, trials and tribulations and instill confidence to stay in business, the RBI, Central and State Governments should announce liberal fiscal incentives, amounting to at least 10 per cent of our GDP.
Many countries including the US, the UK and Japan have announced financial structure package ranging between 12 and 20 per cent of their GDP.
Huge amounts earmarked for several not so important new infrastructure projects, unclaimed ESIC and PF amounts, should be diverted for granting fiscal incentives to bail out the chronically beleaguered segment, he said, enlisting the Chamber’s request.
The Chamber has appealed the governments to direct banks to extend fresh loans up to 50 per cent of the existing loan without demanding additional security, defer loan instalment by a year and waiver of interest during the lockdown period; payment of salary for the lockdown period from the unclaimed ESIC funds; reduction in GST rates at least till the end of this fiscal to 3,9,12 and 18 per cent to accelerate activities; withdrawal of fixed and demand charges of ₹350 per KVA (payable by HT consumers) till December.
“It is not like the storm is over yet, but to put the economy back on track for speedier recovery, the above suggestions should be implemented in word and spirit,” he said.