Former Finance Minister P Chidambaram on Wednesday urged the Narendra Modi government to provide two funds of Rs 1 lakh crore each for wage protection assistance and credit guarantee fund to help Micro, Small and Medium Enterprises to tide over the coronavirus crisis, ANI reported.
“The Congress party has submitted a proposal with specific, well thought out and concrete suggestions to help the 6.3 crore MSMEs,” Chidambaram said in a virtual press conference. “We urge the prime minister to immediately look at that proposal and immediately announce the implementation of two specific recommendations – firstly, a Rs 1 lakh crore wage protection assistance to help MSMEs pay wages and salaries for the month of April and secondly, a Rs 1 lakh crore credit guarantee fund for MSMEs that will help them go to the banks and borrow money.”
The Congress leader said the relief packages were crucial and warned that the sector was in danger of dying without any support from the Centre. He added that 11 crore people are engaged in 6.3 crore MSMEs in India.
“Tomorrow is the last working day of the month,” Chidambaram said. “How will these people feed themselves and their families without an income? These 11 crore people’s livelihoods are in danger now because most of the employers are unable to pay wages and salaries. The businesses have had no sales this month and their payments to their vendors are also stuck, leaving the vendors also in distress.”
The former Union minister said that the time to make “bold decisions” and save MSMEs is now. “It is bewildering that there has been absolutely no financial package or assistance announced for businesses since the onset of Covid-19,” Chidambaram said. “The government may have the luxury of time but the MSMEs do not. They need to know right away whether they will be helped to stay afloat and thereby pay salaries and wages to those dependent on these businesses.”
He also suggested waiver of employers’ contributions to the employees provident fund and employees state insurance, on a temporary basis, for the next three months, adding that this will assist in reducing the payroll costs of employers and retaining the workforce. “This is not a legislation but a financial assistance package,” the Congress leader said.
India has so far recorded 31,332 cases of the coronavirus, which has also killed 1,007 people in the country. Hundreds of thousands of cash-starved small businesses have either deferred or cut their workers’ wages this month due to the pandemic.
Prime Minister Narendra Modi announced the extension of the ongoing nationwide lockdown till May 3, which started on March 25. However, he did not announce an economic revival plan or package for the poor despite repeated requests from state chief ministers for urgent measures that could help them weather the crisis.