The economic measures announced by Finance Minister Nirmala Sitharaman on Wednesday such as emergency credit line of collateral-free Rs 3 lakh crore from banks for MSMEs would provide support to the sector and help revive the country's economic growth, according to exporters.
They also said that the support measures announced in the form of extension of Employees' Provident Fund Organisation (EPFO) contribution by another three months till August, and reduction in contribution from 12 per cent to 10 per cent by private sector organisations and its employees will pave the way for more money in the hands of such employers.
Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said the economic package will help spur growth and strengthen demand and supply chain.
He said that both fiscal and non-fiscal measures announced are much-needed for the economy during such difficult and testing times when global economies are facing the brunt with major disruptions in supply-chains across the world because of COVID-19 pandemic.
"Announcement of Rs 3 lakh crore collateral-free automatic loan has been provided to MSME units with Rs 100 crore turnover, for 4 year term with a moratorium of 12 months, (which) will benefit 45 lakh units across the country," Saraf said.
Sharing similar views, the Apparel Export Promotion Council (AEPC) said that the announcements will leave more money in the hands of people and companies, which will spur economic growth.
"The facility of Rs 3 lakh crore collateral-free automatic loans for businesses, including MSMEs, will help many businesses get over the liquidity crunch and lack of working capital due to disruptions brought in by the pandemic and resultant lockdown," AEPC President A Sakthivel said.
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He said that widening the definition of MSMEs in terms of investment and turnover will enable many of the better doing MSMEs to continue taking benefit of schemes.
"We sincerely welcome the decision to disallow global tenders by the government for up to Rs 200 crore. This will boost the local industries who otherwise found it difficult to compete with foreign competitors.
"Increasing money in the hands of the people through Rs 50,000 crore liquidity via TDS (tax deducted at source) and TCS (tax collected at source) reductions will go a long way in getting the economy back on track," he said.
Financial advisory firm Findoc Group said the measures would help spur growth and make India self reliant.
"The steps would give a restart to the economy. All these steps should boost confidence and should bring smile on the concerned sectors," Findoc Executive Director Nitin Shahi said.
The finance minister on Wednesday unveiled the first set of components of the Rs 20 lakh crore COVID-19 economic stimulus package announced by Prime Minister Narendra Modi.
She announced about Rs 6 lakh crore package comprising Rs 3 lakh crore of collateral-free loans for small businesses and a Rs 30,000 crore lifeline to non-bank and housing finance companies as part of measures to help the economy tide over disruptions caused by the coronavirus lockdown.