Small and medium-sized enterprises (SMEs) have called for restructuring of their loans and easy availability of credit to help them overcome the crisis caused by the Covid-19 pandemic.
Sandeep Belsare, president of the Pimpri Chinchwad Small Scale Industries Association, had met the Union Minister of State for Finance, Dr Bhagwan Karad, on Sunday and asked for a financial package for the SME sector.
Belsare, in his memorandum, had pointed out that all industries in Maharashtra were closed for two months last year during the nationwide lockdown that resulted in huge losses. Many industries continue to struggle to return to normal production levels. While the industries were closed, they had to repay their loans because the banks had given them no leeway.
“We have asked the Union Minister to ensure that the interest and repayment amounts for these two months are canceled,” he said.
Belsare also pointed out that most state-run banks were reluctant to lend to the sector, forcing them to depend on private or cooperative banks with higher interest rates. “The Minister was informed and we asked him to bring out a new policy intended for our sector,” he added.
MSMEs, Belsare said, are facing the growing problem of non-performing assets and, due to the downturn associated with macroeconomic conditions, they are unable to reduce it. The special central government loan package is disbursed mainly through national banks which many small and medium industries are unable to take advantage of.
“The Minister should ensure that the Centre’s programs are also made available to private and cooperative banks. This will help revive small and medium industries, ”he added.
The industry has also called on the government to take action against large companies that fail to pay their suppliers within the 45-day deadline. A proper mechanism needs to be in place to integrate the GST portal with the MSMED law so that stray businesses are reported, he said.