In an e-mail interview with R Arivanantham, Executive Editor, navjeevanexpress.com, Union Minister of State for Finance Anurag Thakur says “Swift and successful implementation of schemes is a hallmark of Modi Government.” Further, after intense deliberations and discussions for weeks, we decided to come up with the Aatma Nirbhar package addressing various limbs of the economy and their issues.
Excerpts from the email interview:
Question: Under ‘Aatmanirbhar Bharat’ a massive package of Rs 3 lakh crore for MSMEs announced in terms of the collateral-free loan. But banks are wary of giving collateral-free loans to the MSMEs. Do you have any mechanism to monitor the progress of loan applications and approvals?
Answer:
We are holding regular meetings to ensure swift implementation of all the announcements, some of which have already happened. Swift and successful implementation of schemes is a hallmark of Modi Government.
MSME is the fuel that will power the success of Aatmanirbhar Bharat. pic.twitter.com/V45ZOPOxdh
— Narendra Modi (@narendramodi) June 2, 2020
The Government announced the scheme under which the banks will lend all businesses, including MSMEs. In a meeting held recently with the heads of the PSBs, we were assured that we would be given a weekly report of the loans sanctioned and disbursed by each bank. We received an overwhelmingly positive response from the bankers and they are ready to offer the loans to the MSMEs.
Finance Minister Sitharaman on Saturday, May 23, asked banks to lend without any fear from three Cs – Central Bureau of Investigation (CBI), Comptroller and Auditor General of India (CAG), and Central Vigilance Commission (CVC). Will the banks overlook the RBI policies in doing so?
The banks will follow RBI policies and circulars. We have assured bankers not to be scared of extending the loans as we cannot operate in an atmosphere of fear. The government has given a 100 percent guarantee now. Bankers must continue to operate without fear. Government and Banks are there to support the industry
and their entrepreneurial spirit.
The primary concerns of the industry, especially MSMEs, are salaries to workers and bank interest during the lockdown period. Will the government consider direct cash relief for salaries and interest deferment?
After intense deliberations and discussions for weeks, we decided to come up with the Aatma Nirbhar package addressing various limbs of the economy and their issues.
For the MSMEs, we came up with various steps, including the announcement of a Rs 3 lakh crore fund wherein the banks and NBFCs can lend the businesses and the Government of India will give 100 percent credit guarantee of interest and principal repayment. Moreover, fresh loans will be given without any guarantee fee and fresh collateral is not required. RBI has also extended the moratorium on term loans for another 3 months. Income tax refunds to over 12 lakh salaried individuals to the tune of Rs. 27,000 crores have also been frontloaded. These measures taken will benefit the businesses and they will have the funds to focus on the operational liabilities.
The industry feels none of the FM’s announcements will help MSMEs immediately, except clearing their pending payments in 45 days. Is anything more in the pipeline for this stressed sector?
The Income-tax Department has also issued Income-tax Refunds of Rs 27,000 crore to 17 lakh taxpayers since April to make liquidity readily available.
Have Public Sector Banks sanctioned loans and what is the total amount?
As of 1 June 2020, #PSBs have sanctioned loans worth
Rs 10,361.75 crore
under the 100% Emergency Credit Line Guarantee Scheme.| @FinMinIndia | pic.twitter.com/zmegRFxioR
— Office of Mr. Anurag Thakur (@Anurag_Office) June 3, 2020
We have announced various steps and measures for MSMEs in particular since they have been hit hard by this pandemic and the subsequent lockdown. As I mentioned in the previous answer, we announced a fund of Rs 3 lakh crore wherein the banks and NBFCs can lend the businesses and the Government of India will give 100 percent credit guarantee of interest and principal repayment. Moreover, fresh loans will be given without any guarantee fee and fresh collateral is not required. We also amended the definition of MSMEs which will enable the firms to take benefit of the priority sector lending even after increasing in size.
Further, the suspension of Section 7, 9, and 10 of the Insolvency and Bankruptcy Code for a year will benefit the MSMEs too. We also announced that global tenders will be disallowed up to Rs 200 crores which will benefit the Indian MSMEs and will be a step towards Aatmanirbhar Bharat.
What will be the impact of agri stimulus in the long-term?
We announced a plethora of historic, long-overdue reforms for the agricultural sectors. Two decades of reforms have been undertaken in two weeks. Farmers will now have a robust farm to market connect, better opportunities to value add to their produce, and get higher incomes.
We announced a Rs 1 lakh crore Agri Infra fund for farm-gate infrastructure for farmers which will help them in the creation of cold-chain facilities and affordable and financially viable post-harvest management infrastructure. We announced amendments to the Essential Commodities Act to enable better price realization for farmers.
Agriculture foodstuffs, including cereals, edible oils, oilseeds, pulses, onions, and the potato will be deregulated. We also announced agricultural marketing reforms to provide marketing choices to farmers. This will ensure barrier-free inter-state trade and will provide the farmers with adequate choices to sell produce at an attractive price.
Despite the stimulus package to revive job opportunities by infusing large funds for SMEs and MSMEs, the reverse migration is still going on. This can be gauged by the number of Shramik special trains being run by the Railways. How will you address this issue?
It is the primary responsibility of the host state and the home state to take care of the guest workers. Both must coordinate and provide support through these uncertain times. The role of the Central Government is to facilitate which has been ensured with the availability of trains to transport them at three hours notice on the request of state governments and also provided free food and water. We ran 3,840 Shramik Special trains and more than 52 lakh passengers have reached their destination. Railways had provided 85 lakh meals and 1.25
crore bottled water to passengers on Shramik specials so far.Bihar, UP, MP have taken the lead to repatriate guest workers. The onus lies with the host and home states.
We gauged the situation and we thereby announced an increase in the MGNREGS allocation totaling up to over Rs 1 lakh crores. The migrant workers who have traveled back can obtain job opportunities and be paid an increased figure of Rs 202 / day under MGNREGS. Moreover, this is an evolving situation, and we are
monitoring it daily.
In the engineering hub of South India, Coimbatore, many private industries have prevailed over the migrants by meeting all their basic needs, including paying full salary for the lockdown period. Why this can’t be replicated all over the country to arrest the reverse migration?
We welcome all those sectors and industries that have looked after their guest workers through this difficult time. The spirit of Team India will help us in economic revival.
The stimulus packages have been dubbed as nothing but a mega loan mela by eminent economists, including former RBI Governor Raghuram Rajan and senior Congress leader and former finance minister P Chidambaram. This will put the banking industry only in dire straits. How will you address this to infuse confidence among the masses?
We have taken feedback from various trade organizations, stakeholders, and people at large and they are happy with the package. We have announced a credit facility specifically for the street vendors; we have promised to release the CPSE and GoI receivables to the MSMEs within 45 days; we amended the definition of MSMEs; we have released a sum of over Rs 20,000 crores to 20 crore women Jan Dhan Account holders; A total of around 7 crores people have already taken free gas cylinders under UJJWALA scheme and a total of Rs. 9,000 crores
have been transferred to bank accounts as DBT; we announced a package for the bee-keeping industry, animal husbandry sector, and even to combat the foot and mouth disease.
We have come out with a comprehensive package that addresses the needs of the nation and we have said that this is just a pause. Since the situation is changing day by day, we are monitoring this and when the need arises, we will be there to support anyone in need.
