Pointing out that the Micro, Small and Medium Scale Enterprises (MSMEs) contributes one third to the nation’s economy, Congress interim chief Sonia Gandhi, here on Saturday, wrote to Prime Minister Narendra Modi on the grave economic crisis facing the nation and demanded a package to give liquidity and confidence to the sector.
In a letter to the Prime MInister, Sonia Gandhi said, “The last five weeks have brought our nation face to face with several challenges. As we continue our fight against Covid-19, I felt it essential to highlight an economic concern that needs immediate attention and intervention. If ignored, this issue has the potential of having a devastating and expansive ripple effect on our economy.”
She wrote the MSMEs contributed close to one third of the nation’s gross domestic product (GDP), accounted for almost 50 per cent of exports and employed over 11 crore people.
“At this moment, without appropriate support, more than 6.3 crore MSMEs stand on the verge of economic ruin,” she said.
Stating that every single day of the lockdown is costing Rs 30,000 crore to the sector, the Congress leader said nearly all MSMEs had lost sales orders, seen complete cessation of work, and had revenue negatively impacted.
“Most worrying of all, 11 crore employees are at the risk of losing jobs as MSMEs struggle to pay wages and salaries. The government needs to introduce a series of measures to meet this crisis head-on or risk a much large economic crisis down the road,” she said.
She urged the government to announce Rs 1 lakh crore MSME wage protection package and set up a Rs 1 lakh crore credit guarantee fund.
She said the actions taken by the Reserve Bank of India (RBI) must get reflected in banks’ measures to ensure adequate, easy and timely credit supply to MSMEs. “These measures need to be supported by an expansion and extension of the RBI’s moratorium on payment of loans for the MSMEs beyond the stipulated three months,” she said.