Money & Banking

Govt guarantee on credit to MSMEs addresses banks’ hesitation, says FM

Our Bureau New Delhi | Updated on May 20, 2020

Finance Minister Niramla Sitharaman is hopeful that the government guarantee on additional working capital loan to Micro, Small and Medium Enterprises (MSME) will facilitate enhanced lending by banks. She has also asked industry to re-skill workers to equip them for the post-Covid regime.

“Full and partial guarantees provided by the government through a special purpose vehicle would address bank hesitation,” she said during her engagement with members of CII here on Wednesday.

She asked industry to reset its relations with workers and plan for labour, including unskilled labour. She advised industry to consider in a professional manner the terms for engaging unskilled workers and work towards skilling employees at all levels. “Industry needs to set examples in handling workers in a way that is acceptable to all,” the Minister stated.

Responding to a question on agriculture, the Finance Minister said comprehensive reforms have been announced. Three model Acts have been shared with state governments. She said many states had commenced work on land reforms.

The National Infrastructure Pipeline will be given a push in order to create demand with a multiplier effect. “Large projects will be front-loaded and this will bring in positive energy and sentiment,” said Sitharaman, while noting that there has been a fair and open interaction on GST, which had dropped to the bottom quarter in inflows. Discussions on the same were underway.

Concerns that large industry, too, was facing a lot of stress, particularly in certain sectors such as tourism, automotive and aviation, were also discussed. Discussions need to be undertaken to protect jobs, increase demand, and ensure survival of large businesses, industry requested.

Published on May 20, 2020

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