Punjab MSMEs incurred loss of over Rs 4,169 crore

CHANDIGARH: Hit hard by disruption of activities caused by restrictions imposed to curb the spread of novel coronavirus, the micro, small and medium enterprises (MSMEs) in Punjab have suffered an estimated loss of Rs 4,169 crore since middle of March.
Punjab’s department of industries and commerce assessed the loss caused by the novel coronavirus pandemic by taking feedback from the industry. The 2.8 lakh MSME units in the state faced heavy loss on account of wages, interest burden on capital, advance to labour and personal income loss to the owners. The average loss per unit in Ludhiana, the industrial hub of Punjab, has been pegged at Rs 1.9 lakh.
Of the 2.8 lakh MSMEs in the state, only about 1.47 lakh have been able to commence their operations, that too, at low capacity utilisation of up to 40% due to disruption in the labour supply, unavailability of raw material.
Punjab lists steps Centre’s stimulus package missed
Based on the feedback of the industry, the department of industries and commerce has compiled a list of measures which have not been included in the stimulus package announced by the central government and are required for injecting new lease of life to industry in Punjab.
As the industrial units are not in position to repay existing loans due to financial crunch, Punjab has suggested to the central government that bank interest on the existing loans may be waived for a minimum of six months. The state warned that if relief is not provided to the industrial units, they will have to borrow more money to repay the existing loans, which will result in many non-performing assets (NPAs) in the future.

The Union government had announced making contribution towards ESI and EPF for industrial units with less than 100 workers wherein 90% workers are up to the wage level of Rs 14,999. The state has suggested to give relief to the whole industrial sector by doing away with both the clauses. Punjab contended that by putting the cap, central government was discouraging employment of more people.
The state also proposed to the Centre that employees insured under ESI should be treated as sick and the epidemic period be treated as sickness period and ESI should pay salaries during this period.
Other suggestions include option to defer tax payments by six months and also permission for delayed Good and Services Tax (GST) payments, without levy of interest, or late fees or penalties; additional benefits over for export oriented unit; and interest subvention for agriculture and food processing industry on their working capital requirement of at least 3%, for a period of 24 months.
Sibin C, director, industries and commerce, Punjab, said based on the feedback received from the industry, the department compiled a list of measures which need to be taken for revival of industry in Punjab. “These suggestions will be sent to the Government of India through CM Amaninder Singh,” said Sibin C.