‘Lack of data impeding revival of MSMEs’ :CIA

The Consortium of Indian Associations (CIA) has urged the Centre to develop Udyog Setu, a mobile application, similar to the Aarogya Setu to bail out the micro, small and medium enterprises (MSMEs) that have been badly hit by COVID-19 as the lack of reliable data was impeding the sector’s revival.

The mobile application will contain all the data pertaining to the MSMEs such as the names of enterprises, turnover, number of employees, plant location and the like.

“The financial stimulus package announced by the Centre for the MSMEs has been a damp squib. A helping hand could not be extended to MSMEs as we are lacking in data on industry, traders, migrant labour, informal workers and many such segments that are not yet the radar of the central and State governments,” said K.E. Raghunathan, convenor, CIA.

“It is necessary to map them immediately through Udyog Setu, similar to the Aarogya Setu. This will help us bring all enterprises, irrespective of size, under one platform,” he said.

Pointing out that in the last 100 days of lockdown, the Centre had announced a few financial stimulus packages for the MSMEs and a few other policy changes, he said out of these, with respect to the ₹3 lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS), only about ₹90,000 crore (about 30%) had been sanctioned and about ₹40,000 crore (about 14%) disbursed as on day 45.

“It is too early to say that economic revival has started, referring to June 2020 tax collections. The worst is yet to come,” he said, adding that the CIA was unimpressed with the collections.Indirect tax collections “should have been ₹1.75 lakh crore for 65 days of invoicing.” he opined.

“The actual impact of COVID-19 would be known only from August as many units would execute pending orders in the next few weeks. “Unless fresh orders come, August will be the worst. CIA expects the worst will be felt during August to December as demand will be very low and financial outflow, especially due to moratorium on interest payments, will be high as moratorium on interest payments will end and rainy season will impact site activities,” he said.

To a query on the way foward for MSMEs, he said that for the ₹3 lakh crore Emergency Credit Line Gurantee Scheme, the Centre should relax the conditions with the date of eligibility of outstanding loan changed from February 29 to March 22. He also said ECGLS must be extended to all eligible account holders who are not declared NPAs as on February 2020 and funds credited as an immediate ad hoc in the account.

On EMIs, the CIA sought an extension of the moratorium till December 2020, while also seeking levy of interest at a reasonable rate on the EMI amount for which moratorium is applicable.

With respect to EPFO payments by the government, he said it came with a rider that made almost 80% of the establishments ineligible to get the benefit. Besides, the CIA said the payment of provident fund and ESI dues should be kept in abeyance for all MSME units till December 2020.

Many individuals and MSME units are still pondering whether to avail EMI moratorium or not, he said.