Reactions from Indian industry on Covid-19 economic package

Here are some of the reactions by leading personalities from the Indian industry regarding the Covid-19 economic package announced today by Finance Minister, Ms Nirmala Sitharaman on the MSME sector.

Bhavin Turakhia, CEO and Co-Founder of Zeta

The first 15 measures announced by the FM today is a great start to revive the economy which is severely impacted due to COVID-19. The packages announced were comprehensive. We welcome the announcement on Rs 3 lakh crore collateral-free loans that will help the MSME sector to rise from this grave period. Rs 45 thousand crore liquidity announced through Partial Credit Guarantee Scheme 2.0 for NBFCs will usher in the much-needed growth and the new definitions of MSMEs will allow more companies to take benefit of the new package.

The Government’s decision to boost liquidity through EPF support and the reduction of 10% out of the existing 12% each for all is highly commendable. The measures undertaken by RBI on the Reduction of Cash Reserve Ratio (CRR) has resulted in liquidity enhancement Rs1,37,000 crores. The decision to disallow global tenders up to 200 crores is likely to be seen as a protectionist move. It is important that we continue to be perceived as a global economy. Startups will have an important role to play in this difficult journey and we are hopeful that the announcements that will follow over the next few days will address this constituent with the same generosity.

Rajan S. Mathews, DG, COAI

Finance Minister’s announcement is in line with the government’s aim to provide the necessary impetus to economic growth and build a ‘self-reliant’ India. We welcome the announcement of all pending payments within 45 days from PSEs to MSME sector. The telecom industry has unutilized GST input tax credit over INR 35,000 crore for which the sector has repeatedly demanded refund.

Moreover, the total outstanding from PSUs is amounting to approx. INR 20,000 crore since long. We hope the Hon’ble Finance Minister, Smt. Nirmala Sitharaman, in the course of next few announcements would give similar relief to the sector that has immensely contributed to keeping the country connected during last 25 years and has kept 1 Bn people connected during the current lockdown situation.”

Dr Arunabha Ghosh, CEO, Council on Energy, Environment and Water (CEEW)

More than half of the INR 5.8 lakh crore stimulus outlay announced today focused on our mammoth MSME sector. As many as 40% of India’s total 450 million informal workers are employed with MSMEs. The recovery of this sector is central to our economic resurgence and the well-being of the workers. The stimulus today addressed both the demand and supply side constraints for MSMEs. The systemic focus on generating a larger market for this sector through local procurement and virtual market linkages are leaps in the right direction. This is especially critical as public procurement is likely to see a huge boost in the coming months. In order to meet this demand, a suite of financial and regulatory measures have also been offered.

The MSME sector is also the backbone of India’s energy transition, and a key source of industrial emissions. Having access to capital will allow this sector to accelerate manufacturing, but in a manner that could potentially improve energy efficiency and trigger the switch to cleaner fuels. CEEW research across hundreds of MSMEs has found that access to capital and larger markets could help MSMEs move to more efficient machinery and appliances as the unit economics of the energy transition become increasingly compelling from a competitiveness point of view.

CP Gurnani, MD and CEO, Tech Mahindra

The Rs. 20 lakh crore economic package will definitely give the impetus to the economy, industry and society; however, as every business is thinking of re-inventing itself to be future-ready, it is our responsibility as a country to define that ‘re-invent India’ strategy, define the role of each of the pillars (economy, infrastructure, technology-driven system, vibrant demography and demand) laid down by the government, break down old policies and re-write collaboration between the private and public sector.

The government is playing the role of an investor to create physical and digital infrastructure, create global standard academic institutions in Artificial Intelligence and data science, nurture local firms to create telecom infrastructure, cyber security global leaders. There was an independence in 1947; now that the fuel has been provided, let’s make 2020 the year when we get independence from a non-digital world to make India truly a global digital leader in every aspect, so that both, the common man and businesses from India come out resilient and self-sufficient.

Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East & Africa, CBRE

The Hon’ble Finance Minister Nirmala Sitharaman today introduced progressive provisions for the MSMEs, NBFCs, contractors and real estate project registrations. The announcement to treat COVID-19 as an event of ‘Force Majeure’ and as an ‘Act of God’, and permission to extend project completion timelines and other statuary compliances under RERA by 6 months is a positive step for the developer community. It will enable them to deliver projects to the end consumer under the new timeline. In addition to this, the announcement of liquidity measures for NBFCs and HFCs is also an encouraging step and will provide much needed relief to the sector.

Rajesh Sharma, MD, Capri Global Capital Ltd

The first tranche of the economic package announced by Honorable Finance Minister shows that the government is embarking on an ambitious reform agenda to cement the Indian economy in the upcoming time. We appreciate the attention to basics like land, labour, liquidity and law where key structural reforms are needed at the moment to overlay the way for the country to become more self-reliant. The fiscal boost for micro small and medium enterprises sector has come at an opportune time to board the growth as the country is looking to become the global manufacturing powerhouse.

Redefining the MSME eligibility criterion and infusion of Rs 50,000 crore equity for standard MSMEs will give an impetus to scale-up their business and draw the much-awaited growth history for the sector. We believe that more funds will reach the common man of the society through steps like liquidity easing, TDS reduction, flexibility in loan disbursals, leading to a pick-up in demand in the coming quarter. A special liquidity scheme of Rs 30,000 Cr will open up additional avenue for raising long term funds at a very competitive cost. Additionally, by providing Partial Credit Guarantee Scheme 2.0 for NBFCs of INR 45,000 Cr will support organisations like us for fresh lending and expand our book portfolio without risk of spike in credit cost for these incremental lending.