Nasscom seeks relief for start-ups, SMEs

Our Bureau Mumbai | Updated on March 28, 2020

Extend CGTMSE scheme to start-ups, it says

The coronavirus pandemic has caused high stress on start-ups putting their continuity at risk, according to Nasscom. Therefore, they are looking to the governments to provide support and relief.

“Start-ups are facing severe time loss and project delays due to the prevailing circumstances; this has contributed to financial pressure on start-ups. We request that the government consider rental subsidy for workspaces used by start-ups which are regulated/owned/managed by government agencies,” Nasscom said, while proposing a host of policy measures.

Among other things, Nasscom has sought blanket suspension of all deadlines, including that of tax payment, until at least 4 weeks post lifting of the all-city lockdown.

The Centre should allow one-time PF opt out option for employees. “Due to a subdued business environment it is very likely that start-ups will not be able to provide for any salary increments to their employees in the current financial year. The Government can consider providing an option to the employees for a one-time PF opt-out option for the next financial year 2020-21,” the IT industry body said.

In such a case, both the employee and employer contributions towards the PF may be transferred directly to the employee. This will result in an increase in the take home pay of the employees. This move will be beneficial for the employees in the lower salary bracket and would lead to a higher take home pay for a majority of the start-up workforce.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme should be extended to start-ups on war footing. It will help start-ups manage cash flows and stay afloat as all VC funding will dry up at least for the next three quarters. Such a scheme for start-ups can be used for providing immediate short term OD facility.

Published on March 28, 2020

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