Following the second wave of Covid-19 leading to lockdown in several states, the industrial sector, particularly MSMEs, which are passing through a critical time, has sought financial support and other relief measures.

At a meeting organised by the Federation of Telangana Chambers of Commerce and Industry to deliberate on the problems confronting MSMEs, various issues were discussed, and they decided to submit representations to the Finance Minister and Governor of the RBI seeking relief.

During the meeting hosted by Ramakanth Inani, President, FTCCI, and attended by various expert committees, industrialists and entrepreneurs, a slew of measures critical to industry’s survival were discussed.

They sought a new scheme on the lines of the Emergency Credit Line under the Guarantee Scheme, which provides comfort to MSMEs, and suggested that the old scheme be merged with the new scheme since repayment and gestation period are longer in the latter. Banks need to be flexible in declaring assets as NPA, and there is a need to revisit the criteria for NPA classification, they felt.

Many micro & small manufacturing firms are unable to realise their dues as per agreed terms. This is resulting in shortage of working funds, calling for immediate attention of the Government.

Restructuring of MSME loans for 2021‐22 should not be restricted to a one-time settlement and there is a need for a steep reduction in interest rate. High interest burden and other charges when revenues and cash flows are low are creating hurdles for the viability of these units, they said.

They felt that there was a need to infuse liquidity into the system and banks should provide working capital based on their cash flows rather than on the conventional turnover-based assessment.

They expressed the need to extend the moratorium up to March 31, 2022 on all EMIs of term loans as well as interest on cash credit accounts.

All these measures should be made applicable to NBFCs as well, thereby ensuring that there is no liquidity crunch, they said.

The Finance Minister has been requested to provide fiscal incentives, including relief under GST by allowing input credit without restrictions and reduction in GST rates, where feasible, to boost demand.

Apart from fiscal measures, social security measures and relief from payment of minimum electricity charges, they felt it was necessary to relax the statutory compliances during this period of Covid-19 pandemic.

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