CII Funding MSMEs to Tackle Covid-19
The Confederation of Indian Industry (CII) is setting up a COVID Relief Fund to assist rehabilitation of Micro, Small and Medium Enterprises (MSMEs) amid Coronavirus pandemic, which has strongly influenced the global economy.
The Confederation has requested its members to contribute an amount from their CSR allocation for the CII COVID Rehabilitation and Relief Fund (CRR). The MSME sector is one of the most severely affected sectors due to travel bans, closure of malls, theatres and educations institutions, taken by the government to fight the outbreak of the coronavirus pandemic. The chairman of the CII National Council Mr Shreekant Smany said “Multiple actions need to be taken on the extension of bank loans, a special fund, steps regarding the filing of GST and improving the welfare of workers. CII stands ready to support the MSME sector in this hour of need through the CII COVID Rehabilitation and Relief Fund.”
Due to this pandemic, the MSMEs are facing. CII has requested for additional ad-hoc sanction of working capital to the tune of 25% of sanctioned limit as a relief measure. CII also suggested deferment of EMIs and interest rate on the working capital. Setting up of a special MSME factoring fund to enable MSMEs to discount their bills to approved retailers in 15 days and permit retailers to pay in 120 days would help in faster realisation.
Creating a corpus by the Government to help MSMEs tide over the crises would help them to pay wages, according to CII. Extension of Non-Performing Assets (NPA) norms cases to 150 days from the present 90 days. If required by industry, ad-hoc limits up to 25 per cent of sanctioned limits may be allowed by banks on SOS basis to overcome temporary liquidity crunch.
CII also emphasised that it is also required to take measures for improving the welfare of the MSME workers during this lockdown. These could include supporting laid-off workers during this period, handling the statutory compliance of compensating workers in case of a shutdown, exploring insurance cover options, 90 days extension for payment of Employer’s contribution of provident fund and ESIS, allowing of CSR funds to support payment of wages to laid-off workers and more.
CII proposed that the Government should draw emergency plans for three periods.
Till March 31
Then for the next two months till May 31
Then for the next 2 months till July 31.
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