Centre working on Rs 1 lakh crore package for MSMEs
Several industry bodies have urged the government to create liquidity by clearing dues from government departments, public sector undertakings, as well as income-tax and GST refunds.Updated: Apr 25, 2020 08:00 IST
The government is working on a Rs 1 lakh crore package to ensure timely refunds of dues to small businesses hit by the covid-19-led lockdown, micro, small and medium enterprises (MSME) minister Nitin Gadkari said on Friday. The minister also said that the government is poised to change the definition of MSME, a proposal that is awaiting approval from the Prime Minister.
“We have decided to set up a (revolving) fund of Rs 1 lakh crore and we will insure it and its insurance will be paid by the government. We will fix a formula among (the stakeholders) and provide minimum Rs 1 lakh crore and the interest on the same,” Gadkari said in a video conference hosted by the Associated Chambers of Commerce and Industry of India (Assocham).
“We are in the process of finalising the scheme and will soon send it to the finance ministry for approval. This will be one of the ways to increase liquidity,” the minister said.
Gadkari said he has also requested finance minister Nirmala Sitharamana to fast-track the process of tax refunds and pay them within eight days of filing returns.
Several industry bodies have urged the government to create liquidity by clearing dues from government departments, public sector undertakings, as well as income-tax and GST refunds.
Gadkari also said that he has urged labour minister Santosh Gangwar to make use of Rs 80,000 crore lying with the Employees State Insurance Corp. to tide over the immediate crisis faced by the MSMEs, as the pressure for April salaries and wages is mounting. The proposal will have to be examined by the finance ministry and the Prime Minister’s Office (PMO), he said.
The government is also set to redefine MSMEs based on their annual revenue, replacing the definition that relied on self-declared investment on plant and machinery. This is aimed at aligning them better with the GST regime and encouraging ease of doing business.