Sitharaman addresses MSME loan concerns
The government is working with the Reserve Bank of India (RBI) on the Industry’s need for the restructuring of loans due to the COVID-19 impact, Finance and Corporate Affairs Nirmala Sitharaman announced while addressing the National Executive Committee Meeting (NECM) of the Federation of Indian Chambers of Commerce and Industry (FICCI).
“The focus is on restructuring. The finance ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required is well taken,” she said on 31 July 2020.
Elaborating on the extensive consultations on the reform measures that are being announced by the government, Sitharaman said, “Every step which is being announced and taken, is taken after exhaustive consultations with the stakeholders and within the government to make sure that no step is going to be a failure because we did not make necessary collateral changes. We have taken these steps to ensure that the impact is felt on the ground.”
She also addressed the FICCI members’ concerns on the difficulties faced by the MSMEs in taking loans under the Government’s Emergency Credit Guarantee Scheme.
“Banks cannot refuse credit to MSMEs covered under the emergency credit facility. If refused, such instances must be reported. I will look into it,” the Minister assured.
“The work is going on the Development Finance Institution. What shape it will take, we will know shortly,” she said responding to FICCI call for the creation of a Development Finance Institution to handle the emerging credit requirements of the industry.
Stressing on the need for reciprocity in trade deals, Sitharaman said, “Reciprocal arrangements are being asked with the countries with which we have opened up our markets. Reciprocity is a very critical point in our trade negotiations.”
The Finance minister said that the decision on reducing GST rates on healthcare and other products will be taken by the GST Council.
Sitharaman said the Finance Ministry is working with RBI on the demand of the hospitality sector for extension of the moratorium, or restructuring.
“I fully understand the requirements of the hospitality sector on extension of the moratorium, or restructuring. We are working with RBI on this,” she said.
FICCI President Dr Sangita Reddy appreciated the government’s proactive approach in dealing with the situation.
“While the green shoots of recovery are being seen, sustaining this improvement in the operational parameters of businesses will require continuous support from the government. The support is particularly needed in the realm of strengthening market demand and to boost demand,” said Dr Reddy. #economy #credit #loans #MSME #borrowings #banks #trade #exports /fiinews.com
