NEW DELHI: India’s MSME sector is gasping for life and may not survive the impact of the coronavirus pandemic unless it gets emergency funding, Union minister Nitin Gadkari said on Thursday.
Speaking to automobile lobby group SIAM through video conference, he urged major industries to clear their pending payments to small businesses within a month.
He conceded that the Centre, state governments and public sector undertakings also owe large sums to MSMEs, but added a financial package for the sector is in the works.
“We are trying our level best to get a good package to MSMEs where the problem is serious. I expect it to be declared by the government as early as possible,” he said.
The minister had recently said the government would set up a Rs 1 lakh crore fund to clear outstanding payments to MSMEs. He added there is a plan to restructure 25 lakh MSME loan accounts by December this year, up from 6 lakh till March 31.
According to estimates, there are 6.34 crore MSMEs employing over 11 crore people. Micro enterprises, whose annual turnover is less than Rs 5 crore, account for over 99% of the total MSMEs in the country.
Various research papers have shown that Covid-19 has stalled business activities of MSMEs, leaving them with no working capital.