Hyderabad: The measures announced by the Finance Minister Nirmala Sitharaman to deal with coronavirus have evoked mixed reactions from the industry. While the measures mainly aim at the bottom of the pyramid, the industry feels that that the announcements are crucial at this stage. This also paves way for a announcing some support to the industry, ailing due to lockdown, sagging demand and subsequent closure of manufacturing facilities.
“The Government agreeing to pay the EPF contribution of both employers and employees will help the small industries,” said K Sudhir Reddy, president, Telangana Industries Federation.
The Government said EPF contribution will be for three months for all establishments with less than 100 employees out of which 90 per cent earn less than Rs 15,000 per month. The contribution paid by the employer is 12 per cent of basic wages plus dearness allowance plus retaining allowance. An equal contribution is payable by the employee also. In some cases, the contribution by either, subject to some conditions, is pegged at ten per cent.
Among other things, the Government has announced cash transfer to the poor. “The cash transfer and provision of grains and pulses will come handy for many people. This is important considering that many of the factories and manufacturing units are under lockdown,” Koteswara Rao, convenor, All India Forum For Small and Medium Enterprises.
The Government has doubled collateral-free loan to Rs 20 lakh to 63 lakh women self-help groups and this will impact seven crore households.
“There is a need-based finance to help the industry come back on rails immediately. This will impact production, employment, revenues, interest payment to banks and increasing the credit offtake,” he said adding that coronavirus is going to have a larger ramifications encompassing all walks of life, businesses and industries.
FTCCI president S Karunendra Jasti had recently said there is a need to create a fund for MSMEs and extend working capital loans at no interest or minimal interest (2-3%) to tide over their financial crisis.
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