The stimulus package announced by Finance Minister Nirmala Sitharaman evoked mixed response among industry captains here.

While industry associations like Codissia, Southern India Engineering Manufacturers Association (SIEMA), Confederation of Indian Textile Industry (CITI) and Apparel Export Promotion Council (AEPC), among others, hailed the package as they felt that the FM’s the Union Finance Minister Nirmala Sitharaman’s announcements met their demands, and would help infuse liquidity in the system as well as spur economic growth, a cross-section of businessmen that this correspondent spoke to said they “do not really see anything coming out of the package”.

“MSME classification is fine; offer of collateral-free loan is pleasing to the ear; but at what cost (rate of interest) and the repayment tenure?” asked an exporter, preferring anonymity.

Sharing his experience, the exporter said, “Three days back, I approached my banker for finance accommodation of ₹4 crore to buy a imported second-hand machinery from South Korea. The deal was very attractive and the machinery exporter was ready to ship it. Our financials were good, but the banker contended that “under Covid conditions, he would not be able to do anything”.

“I said I would shift the limits altogether to some other bank and he simply said “it’s your prerogative”.

“The FM’s announcement has come yesterday. I will be approaching the bank today to find out the conditions. The lender had then (three days back) insisted on a collateral, worth at least 50 per cent of the value of the machinery.

“Though the directions come from the powers that be, banks are reluctant to extend credit; more so, if it has to be without a collateral. Availing credit from banks has never been easy; it is not only cumbersome, but one needs some clout too,” he added.

Yet another exporter (of tea) said that the government should support the sector by extending credit at lower rates of interest, and help develop tea-bag making machinery under the “Make in India” initiative as imported ones are prohibitively expensive.

“It is not impossible to develop the machine, but we need to look at volumes, else we will find it difficult to become globally competitive,” retorted another exporter of tea.

Meanwhile, industry sources did not fail to point out that the markets did not react positively to the FM’s announcement ― neither at close yesterday nor this morning.

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