It was a mixed welcome from trade and industry in Telangana to the set of ‘getting back to work’ measures, particularly for micro, small and medium enterprises (MSMEs), announced by Union Finance Minister Nirmala Sitharaman on Wednesday.
While CII Telangana State Council chairman Krishna Bodanapu said it was a much-needed package for MSMEs, co-convenor of CII-TS MSME panel Abhijith Jayanthi thanked the government for “putting up a decisive step forward during these unprecedented times.”
The quantum of support extended is definitely an encouraging step. An announcements that will positively impact MSMEs is the decision not to float global tender for government procurement order upto ₹200 crore. It will support MSMEs and enable investment flows into the enterprises, Mr. Jayanthi said.
General Financial Rules will be amended to disallow global tender enquiries in procurement of goods and services of value of less than ₹200 crore, an official release on the announcements said. Welcoming the tender norms, Telangana Industrialists Federation President Sudhir Reddy said overall MSMEs were expecting more.
They looked forward to measures that will help relieve financial burden they faced on account of the units remaining shut for about 50 days, in view of COVID-19 triggered lockdown, and at present permitted to operate well below capacity. During the period, they had to pay salaries, power bill and and service bank loans.
On the emergency credit line to businesses/MSMEs from banks and and NBFCs, upto 20% of entire outstanding credit as on February 29, to be made available with no guarantee fee and no fresh collateral, he said it will only help the units pull along for a few more months. The Centre should have considered reducing the interest rate on loans and reimbursed at least 50% of salaries paid by the enterprises. The announcement revising the definition of MSME by raising the investment limit and introducing an additional criteria of turnover was a long pending demand and little to do with COVID-19 relief package, Mr. Reddy said.
Federation of Telangana Chambers of Commerce and Industry (FTCCI) president Karunendra S. Jasti said it is an excellent move. He also welcomed the government decision to release all pending payments from PSUs and CPSUs over the next 45 days.
With regard to decision to extend by three months a scheme under which Centre contributed 12% of salary each on behalf of both employer and employee to EPF, for wage-earners below ₹15,000 per month in enterprise having less than 100 workers, Mr. Jasti said it was disappointing as the scheme should have been extended to all MSMEs. He said with discoms of all states given ₹90,000 crore to tide over their financial crisis, the utility in Telangana should waive the fixed charges for industries for at least April, May and June.
TS Federation of Textile Associations president Prakash Ammanabolu said the collateral free loan to MSME is a good move. But, it is unfortunate and disappointing that there is no package for the trade.
