MSME package

This has reference to ‘MSME relief package is a damp squib’ (July 2). The stimulus package was announced by the government in May and it is time the government reviewed the success of its relief measures and made changes to the extent required.

The government should hold dialogues with the RBI, SIDBI, banks and assess the pitfalls in the stimulus package. It may take some more time for demand to pick up as the country is still to come out of lockdowns but the units should be able to withstand the stress for some more time. This is where the government and banks have a role to play as closure of MSME units, once started, will have cascading effect on the economy.

The solution lies in a mix of more lenient NPA norms for MSMEs, soft loans and dynamic working capital assessment by banks to accommodate shocks and changes on an ongoing basis. For instance, if MSMEs have to make GST payment ahead of realisation of debtors this additional outflow needs to be factored in working capital assessment as current assets.

Similarly, Covid would have resulted in some stocks being retained beyond normal life cycle and receivables not collected on due dates. A practical view needs to be taken by banks and the working capital cycle needs to be elongated to suit the changing circumstances.

M Raghuraman

Mumbai

Privatisation of train service

The invitation to private companies by the Railway Ministry to run 109 OD (origin-destination) pairs of routes is one of the biggest reforms. There are always pros and cons for everything, but the change has to happen some time down the line. This is a kind of pseudo privatisation but it will lead to better infrastructure which, in turn, would result in improved amenities for travellers.

Investment by private players will free up resources for the Railways to invest in tracks, freight corridors, etc. There will be a healthy competition in maintenance and cleanliness between government and private operated trains, which will result in improvisations. However, it should also be seen that this is not the first step towards total privatisation of the Railways. The government should also ensure that no employee will lose his/her job by this move.

Ravi Teja Kathuripalli

Hyderabad, Telangana

Ban on Chinese apps

As the Chinese military aggression in Galwan Valley, Ladakh, shows no signs of abating, a multi-pronged response is needed from the Indian government. While one cannot be sure whether the banning of 59 Chinese-based mobile applications, including ‘TikTok’, qualifies to be a rationale response, few can deny the fact that it could hurt the business interests of Chinese companies having a huge stake in the Indian market.

While reserving the right to pursue diplomatic and military means to check Chinese aggression on the LAC, we need to ensure our responses on the trade and economy fronts are well-calibrated. As we now depend more on China in meeting domestic manufacturing requirements, we stand to lose more than gain by banning Chinese products. Concrete steps to boost our domestic manufacturing capabilities and export competitiveness are needed.

M Jeyaram

Sholavandan, TN

Not the right approach

This refers to the editorial ‘Tackling China’ (July 2). The ban may be absolutely justified and warranted but the government justifying for this draconian action is that these apps are prejudicial to the nation’s interests.

However, this action is against the principle of natural justice. Prior to outright ban, all such companies should have been served show-cause notices to prove their innocence and not the other way round. This strategy would have yielded much more commendation from the world and not viewed as a pure retaliatory measure. India being a democratic country ought not follow the practices of totalitarian nations.

The Government ought to tread with caution before going overboard and ensure that its strategy does not backfire.

Deepak Singhal

Chennai

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