May. 4, 2020
Minister of Micro, Small and Medium Enterprises (MSME) Nitin Gadkari said that the Centre at present is working on a Rs 1 lakh crore package to ensure timely refunds of dues to the small businesses that have been hit by the coronavirus-led lockdown. Gadkari said that the Centre is poised to change MSME’s definition, a proposal which is awaiting Prime Minister’s approval.
In a video conference hosted by the Associated Chambers of Commerce & Industry of India (Assocham), Gadkari said that “We have planned to set up a (revolving) fund of Rs one lakh crore and we will insure it & its insurance will also be paid by the government. We will fix a formula among (the stakeholders) & provide minimum Rs one lakh crore and the interest on the same”.
He added that “We are in the process of finalising this scheme and we will soon send it to the ministry of finance for approval. This would be one of the ways to increase the liquidity”.
The minister said he has also requested Nirmala Sitharamana, finance minister to fast-track the process of tax refunds & pay them within eight days of filing returns.
Many industry bodies have asked the Centre to create liquidity by clearing the dues from government departments, public sector undertakings and income-tax & GST refunds.
Gadkari told that he has urged the labour minister Santosh Gangwar to utilize Rs 80,000 crore lying with the Employees State Insurance Corp. to tide over the immediate crisis faced by the MSMEs, because the pressure for April salaries & wages is increasing. He said the proposal will have to be checked by the finance ministry & the Prime Minister’s Office (PMO).
In addition, Centre is set to redefine Micro, Small and Medium Enterprises based on their yearly revenue, replacing the definition, which relied on self-declared investment on plant & machinery. The move aims at aligning them better with the GST regime & encouraging ease of doing business.