Corona impact – 61.1 lakh MSMEs down and out with 15.11 lakh crore credit

Sl. No.

Challenges

Impact

Industry Request / Solution Requested

1. Cancellation of Orders.
2. Piling up of stock.

Special Package for MSME’s working in following sectors (reference CARE rating done in Mar’20) to revive :-

1. Bicycle and Parts.

2. Auto & Auto Ancillary.

3. Textiles.

4. Aviation.

5. Education.

6. Hotels & Tourism.

7. Metal.

8. Paper & Paper products.

1. Working Capital Jeopardized.
2. No sales / No Profit.
3. No cash flows.

Cash Flow & Working Capital Support :-

1. Waiver of Interest on Working Capital & Term loan /WCTL for atleast 12 months.

2. Deferment of EMI on Term Loan / WCTL ect for 12 Months.

3. Moratorium on payment of LC’s or converting it to Fund Based loan.

4. NPA Norms in genuine cases to be extended to 150 days.

1. Outflow of WC funds towards various expenses leading to depleting solvency.
2. Sustenance challenge if slowdown continues for 4-6 months.

1. Interest subsidy from government on WC Loans for MSME’s.

2. Post Lockdown is open – Corpus for MSME would be required, which can be availed through SIDBI or nodal agency on case to case basis, on which Interest free loans / soft working capital loans can be disbursed.

3. During Lockdown – Waiver of 3 months interest on Term Loans and Working Capital Limits.

4. Reduction in promoters contribution by way of allowing Debtors upto 365 days and margin on stock and debtors to be contributed at 10%.

5. Adhoc facility of 25% with 3 year tenor, to be allowed to MSME’s without any additional interest so as to cope up with slowdown. Each bank is allowing adhoc Limit, but the interest & the % of Adhoc Limit Varies. Request you to order to Banks that 25% Adhoc with 8% interest from all banks to all account holders.

1. Depleting WC funds with no cash flows coming.

Wage Support is requested by way of :-

1. Corpus to meet wage liabilities during shutdown maybe through EPF, ESIC etc.

2. 50% wage subsidy to MSMEs for registered workers for 6 months.

1. Fixed cost with no cash flows coming leading to depleting WC funds.

Support from SEB’s to industrial units :-

1. No fixed charges on Industrial power to consumers till Sept-20.

2. No interest on late payments upto 1 month or deferment of

1. Regulatory norm has to be met with squeezed WC in hand.

1. Raise threshold limit of GST Compliance to Rs.1 Cr a year turnover.

2. Interest free GST deferral scheme for next 1 year.

3. Deferment of depositing advance tax by one quarter. Like Q1 return to be filed till 15-Sept-20 and no penalty of delayed filing.

4. Expedite VAT/GST refunds.

5. A transparent monitoring GST portal should be made, where against credit available, an MSME can avail short term loan from Financial Institutions.

1. Regulatory norm has to be met with squeezed WC in hand.

Income Tax Relief :-

1. Suspension of TDS for payment of salaries for atleast 9 months.

2. Expedite Tax refunds due to MSME’s

3. Monitoring portal for delayed refunds.

4. Deferment of depositing advance tax by one quarter. Like Q1 return to be filed till 15-Sept-20 and no penalty of delayed filing.

1. Migrant workforce moving to native states, leading to disruption of manufacturing activities after lockdown is over.

1. Sustenance support for laid-off workers.

2. Some corpus for maintain migrant workforce.