Indian textile and apparel industry has appreciated the package of Rs. 20 lakh crore – the biggest relief package ever in the Indian history.
Nirmala Sitharaman, Minister of Finance and Corporate Affairs, today shared details of this package. The package includes Rs. 3 lakh crore collateral-free automatic loans for businesses, including MSMEs. Notably, borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnover will be eligible for this.
These loans will be for 4 years with moratorium of 12 months on principal repayment and interest to be capped. There will be a 100 per cent credit guarantee cover to banks and Non-Banking Financial Companies (NBFCs) on principal and interest.
These schemes are available till 31 October 2020. Importantly, 45 lakh units will be benefited from this as they can resume their business activity and safeguard jobs.
In another step, Rs. 20,000 crore subordinate debts have been announced for stressed MSMEs, which will benefit 2 lakh MSME units.
To overcome unfair competition, global tenders to be disallowed in Government procurement tenders up to Rs. 200 crore. Necessary amendment of general financial rules will be effected in this regard.
Similarly, there will also be Rs. 50,000 crore equity infusion for MSMEs through Fund of Funds. To be operated through a Mother Fund and few daughter funds, this will help to expand the size and capacity of MSMEs.
The definition of MSMEs too will get a revision, in addition to investment limit being revised upwards, and additional criteria of turnover also being introduced.
Industry has welcomed the announcement and appreciated the Government for the decision. The industry believes that if such reforms take place, the small, cottage and MSME sector can contribute hugely towards the employment generation and higher GDP of the country.
“We appreciate this package, it is laying out a comprehensive vision to spur growth and become self-reliant India. Reduction of employer as well as employee’s EPF contribution for business and workers for 3 months from 12 per cent to 10 per cent to other than support received under Pradhan Mantri Garib Kalyan Package (PMGKP) is really appreciable. We also appreciate other direct tax measures and extension of income tax return filing,” shared Raja M. Shanmugam, President, Tirupur Exporters Association.
“Package of Rs. 20 lakh crore combined mainly with bold structural reforms will help Indian manufacturing sector integrate into global value chain. We welcome these announcements and expect specific support measures for labour intensive sectors in FM’s announcement in the coming days. As mentioned in the PM’s speech, focus on liquidity will bring much needed relief to our sector,” says Prabhu Dhamodharan, Convenor, Indian Texpreneurs Federation (ITF) Coimbatore.
Export Promotion Council for Handicrafts (EPCH) also welcomes the announcement and says that it is a bumper package. Rakesh Kumar, DG, EPCH said that Prime Minister emphasised that package will primarily benefit cottage and MSME sector, thereby benefitting around 7 million artisans from the country.
“Even our Prime Minister also specified about land and labour reforms, which is a need of the hour. Presently, a land for industry has become out of reach for the entrepreneurs of small and MSME sector. In fact, a huge investment of the entrepreneurs is spent alone on the purchase of land instead of better technology, R&D and special effort for marketing and brand building,” he shared.
It is pertinent to mention here that textile and apparel industry across India was eagerly waiting for such a package.