Ailing industry finds FM’s balm ineffective

Ludhiana: All hopes of city businessmen were dashed on Wednesday when finance minister Nirmala Sitharaman divulged the details of Prime Minister Narendra Modi’s Rs20-lakh-crore economic package. Since Tuesday evening, businessmen were in a jubilant mood after the PM announced the package.
According to businessmen, except for changing the definition of micro, small and medium enterprises (MSME), not a single announcement made by the FM was going to help them. Moreover, the announcement of collateral-free Rs 3-lakh-crore worth loan to MSME was not going to serve any purpose when nothing has been done about the existing loans, they said.
Criticising the package, Rahul Ahuja, Punjab chairman of CII, said, “This is a total disappointment in the name of economic package. Instead of giving any benefits to the MSMEs, it will make them more debt-ridden. Rs 3-lakh-crore worth loan has been announced for them, but nothing has been done to address the old loan issues, like waiving the interest of lockdown period and lowering rate of interest. We fear it may only lead to businessmen availing these loans to pay off their old debts and eventually ending up as bankrupt. The only good part of this package is changing the definition of MSME, which will now cover large number of industries in micro and small sector.”
According to charted accountant Ashok Goyal, “There is nothing in the announcement for establishments having either a turnover of more than Rs 100 crore or capital investments of more than Rs 20 crore. Besides, the reduction of provident fund by 2% for employee and employer for the next three months is not beneficial because this is not contributed by the government and puts an employee in a disadvantageous position, for he will lose 6% on his savings, which were supposed to be contributed by the employer. We want our government to take care of other sectors left out in their economic package. I hope banks will come forward now and provide 20% more credit facilities to MSMEs as promised in FM’s announcement.”
Harish Kairpal, finance secretary of Knitwear Club, dubbed the package as a cruel joke. “How can we call it a relief package when it does not offer any relief to us? Only date of filing income tax return has been deferred, but income tax has not been lowered.”
Narinder Bhamra, president of Fasteners’ Manufacturers’ Association of India, said, “Since Tuesday, great hype was created on social media by the BJP leaders about this Rs 20-lakh-crore package, which has turned out to be another joke. None of our real concerns, like lowering the GST rates, waiving interests and penalties on non-filing and reducing the complications in filing returns, were addressed. These are mere announcements. In the past as well, promises of collateral-free loans were made by the government, but the banks never complied. How can we expect them to give Rs 3 lakh crore to MSMEs this time?”
According to Dinesh Kalra, general secretary of Ludhiana Business Forum, “The package could have been better if feedback was taken from businessmen about the problems they were facing. The only good parts of the announcement are re-defining the MSME and reduction of rate of interest of employees’ provident fund contribution.”