According to the Global Alliance for Mass Entrepreneurship, about 6 crore micro small and medium enterprises need immediate relief ranging from short-term liquidity to simple compliance. It is also said that one-third of these small scale business could become extinct if adequate loans and active support from the government and industrial bodies are not provided to them.
According to recommendations published by GAME on Saturday, the MSME sector, which contributes nearly 25% of the services GDP and 33% of the manufacturing output, needs to be communicated well about the schemes and the stakeholders should mandate 30% of the stimulus package to be released to enterprises falling into the micro and small categories and relax norms so that borrowers can repay loans in a longer timeframe and allow exemption from bank guarantees.
“Short-term liquidity relief; medium-term dramatic simplification, digitization, and decriminalization of compliances; setting up an implementation body with active state representations are the three crucial steps we have recommended apart from other measures for the MSMEs to revive,” Venkatesan told ET.
Among other suggestions, the task force has recommended if there could be 1 lakh crore worth of new loans to the first time MSME borrowers. “This could include Rs 1 crore loans, each with a ticket size of Rs 1 lakh with a credit backstop by the government,” said GAME.