17,000 new credit cards issued by ICICI linked to wrong users

The second wave has even more vigorously ripped the economy particularly the MSME sector

A Parliamentary panel report has pointed out that the stimulus package announced by the government for the revival of the pandemic-hit economy does not prove to be adequate.

The second wave of Covid-19 has jolted the economy particularly the MSME sector, further delaying the process of economic recovery, according to the report of the department-related Parliamentary Standing Committee on Industry on the impact of COVID-19 pandemic on micro, small and medium enterprises (MSME) sector.

The report asks the government to announce a much larger economic package to boost demand, job creation, investment, and exports. This will help the economy and the MSME sector to recover from the effects of Covid-19.

“The committee observes that the stimulus package announced by the government for the economic revival from the pandemic hit economy has been found to be inadequate as the measures adopted were more of loan offering and long-term measures instead of improving the cash flow to generate demand as immediate relief,” it said.

Impact on MSMEs

Most of the MSMEs faced extreme liquid crunch and needed cash to cope with the unprecedented circumstance.

The MSME association in a report submitted to the government has said that 25% of MSME loans could slip into default as they are finding it difficult to draw working capital from banks.

“Necessary guidelines should be issued for mandatory reporting of the delayed/pending payments (beyond 45 days) to MSMEs, by CPSEs/PSUs in their Annual Reports, in a separate section, as it would impress upon the CPSEs/PSUs to make payments to MSMEs in a time-bound manner,” the parliament report said.

It suggested that strict provisions against delayed payments need to be put in place to ensure timely release of payments by CPSEs which will immensely help the MSMEs to meet their working capital/credit requirements.