MSME industry cheers FM’s announcement

K Sudhir Reddy, president, Telangana Industrialists Federation, said credit flow will increase due to the incremental 20 per cent loan without the need for additional collateral

By Author  |  Published: 14th May 2020  12:01 amUpdated: 13th May 2020  11:01 pm

Hyderabad: Finance Minister Nirmala Sitharaman’s explanation about the components of the Rs 20 lakh crore- plan has cheered up the liquidity-starved industries but say they will have to see the guidelines to understand its impact and implementation.

K Sudhir Reddy, president, Telangana Industrialists Federation, said credit flow will increase due to the incremental 20 per cent loan without the need for additional collateral. The Central Government will give credit guarantee for this. “Many micro, small and medium units have been looking for loans. The additional 20 per cent loan on the existing collateral will help,” he said.

The industry has been asking for revising the definitions of SME units for long. “The revision was needed in view of the inflation and the change in the rupee value,” Reddy said.

Earlier units with Rs 25 lakh in plant and machinery were called micro units, those with up to Rs 5 crore as small and those about Rs 10 crore as medium units. Now, the limits have been increased to Rs one crore, Rs 10 crore and Rs 20 crore respectively. Now, turnover is also seen as a metric- those with a turnover of Rs 5 crore will be categorised at micro, with Rs 50 crore as small and those with Rs 100 crore turnover as medium enterprises, he said.

“The annoucement to create a Rs 20,000-crore fund to bail out stressed units will help the units that have turned NPAs or are on the verge of turning into NPAs,” he said.

Among others, the decision to not allow global players in tenders below Rs 200 crore will give a push to the local industry, said M Prabhakar Rao, convener, All India Forum for Small and Medium Enterprises.

The pending dues form the Central Government and allied bodies will be released in 45 days. That will also ease the liquidity crunch in the industry, he said.

Arjun Ranga, Managing Director, Cycle Pure Agarbathies, said: “Reducing the TDS rate will increase the liquidity. Expanding the MSME definition and not differentiating between manufacturing and services will make more units eligible.” The micro and small vendors of the company will get relief and will help them get back to work soon,he said.

Karunendra S Jasti, President, FTCCI, said: “With regard to EPF, we always felt that the government should waive out riders that were there earlier. We felt it should be made available to all MSMES across the board without any restrictions on the numbers or the percentage of the salary being paid. This is not done and it is disappointing that they have stuck to their old stand, which needs to be relooked.”

“Increase in time for tax-related payments and filing of returns is good. We want to see how the money is infused by monitoring the banks and implemented and service extended to the MSMES,” he said.

Rajesh Sharma, President, Telangana Consumer Products Dealers Association, said 45 lakh SME will stand to benefit from the special loan scheme. The Fund of Funds announced with aid in growth of the MSME sector.


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