Congress leader Jairam Ramesh on Thursday said Micro, Small and Medium Enterprises (MSMEs) in the country are in deep distress due to the COVID-19 pandemic and urged the Central government to announce tax sops and a Rs one-lakh crore relief package to help them.
In a letter to Minister for MSMEs Nitin Gadkari, Ramesh called for ensuring liquidity for continuity of the businesses of these enterprises, preventing mass unemployment, improving consumer sentiment and investment appetite after the lockdown as well as deferment of payment of dues and pausing litigation.
As part of relief measures, he also sought tax exemptions for the medium and small industry, rescheduling their loans, besides setting up of a control room and helpline to provide cross-country logistical support to them.
The former union minister also suggested that ad-hoc working capital loans of up to a maximum of Rs 30 lakh be provided to the medium and small industry.
Ramesh said India has 6.33 crore MSMEs employing more than 11 crore people and they contributed nearly close to half of the country's total exports and almost one-third of India's GDP.
"Since the COVID-19 outbreak, the closing of international borders followed by the near-complete domestic lockdown has led to MSMEs facing a sharp demand depression and a massive cash crunch," he said in his letter.
Almost all MSMEs have seen a fall in the number of orders and their inventory levels are rising, he said, adding that exporters are staring at cancelled orders and payments worth crores are delayed.
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