Published: April 26, 2020 12:45:48 am
Congress president Sonia Gandhi on Saturday wrote to Prime Minister Narendra Modi, asking him to announce a financial package for revival of the MSME sector — including earmarking of Rs 1 lakh crore each for ensuring protection of wages and for setting up a credit guarantee fund.
Ignoring economic concerns of the MSME sector can have a “devastating and expansive ripple effect” on the economy, Sonia wrote. Arguing that micro, small and medium scale enterprises (MSMEs) contribute close to one-third of the nation’s GDP, employ over 11 crore people, and account for nearly 50 per cent exports, she pointed out, “at this moment, without appropriate support, more than 6.3 crore MSMEs stand on the verge of economic ruin.”
Sonia wrote: “Every single day of the lockdown comes at a cost of Rs 30,000 crore to the sector. Nearly all MSMEs have lost sales orders, seen a complete cessation of their work, and have had their revenue negatively impacted by the lockdown. Most worrying, the 11 crore employees are at risk of losing jobs…”
She asked the government to take steps to meet the crisis “head on”, or “risk a much large economic crisis down the road”.
Sonia listed five suggestions, which Congress leaders said were finalised on the basis of a report given to her by the Manmohan Singh-headed consultative group. Party leaders said the group had received over 60,000 suggestions from across the country.
Senior Congress leader Rahul Gandhi had last week sought suggestions from the public for an economic stimulus package for the MSME sector.
Sonia wrote: “Announce a Rs 1 lakh crore ‘MSME Wage Protection’ package. This would go a long way in shoring up these jobs, boosting morale as well as greatly alleviating the predicted economic spiral. Establish and deploy a credit guarantee fund of Rs 1 lakh crore. This is necessary to provide immediate liquidity to the sector and ensure adequate capital is available to MSMEs at a time when they need it the most.”
In other suggestions, Sonia stated that “actions taken by RBI must get reflected in actions by commercial banks to ensure adequate, easy and timely credit supply to MSMEs.” She said any monetary action at the “RBI’s end must be supported by sound fiscal support from the Government” and demanded setting up of a “a 24×7 helpline in the Ministry to provide guidance and to assist MSMEs during this period, would also be of enormous value.”
Former Finance minister P Chidambaram said Sonia’s letter is a well-considered blueprint to save and revive the MSMEs of the country. “We are still awaiting FAP II promised by the Finance Minister exactly one month ago. Meanwhile, the MSME blueprint is Congress’ contribution to re-start the economy. I hope the government will act on the blueprint,” he said.
Meanwhile, former PM Singh and senior Congress leaders slammed the Centre for freezing dearness allowance (DA) of Central government employees. “We should be on the side of people whose dearness allowance is being cut. I sincerely believe it is not necessary at this stage to impose hardships on the government servants and also on the armed forces people,” Singh said in a short video of a meeting of the group.
Rahul Gandhi said, “I see the problem is that you are building your Central Vista (in New Delhi) at the same time…. You are taking away money from the middle class… and you are spending it on Central Vista.”
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