Congress president Sonia Gandhi on Saturday wrote to Prime Minister Narendra Modi drawing his urgent attention to the financial crisis in the MSME Sector by announcing a Rs 1 lakh crore wage protection package for it besides setting up a Rs 1 lakh crore credit guarantee fund. She also called for an extension of the RBI's moratorium on payment of loans for the MSMEs beyond the stipulated three months.
Pointing out that the Micro, Small and Medium Scale Enterprises (MSMEs) contributes one-third to the nation’s economy, Sonia wrote to PM demanding a package to give liquidity and confidence to the sector.
"The last five weeks have brought our nation face to face with several challenges. As we continue our fight against Covid-19, I felt it essential to highlight an economic concern that needs immediate attention and intervention. If ignored, this issue has the potential of having a devastating and expansive ripple effect on our economy," Sonia said.
She wrote the MSMEs contributed close to one third of the nation'’s gross domestic product (GDP), accounted for almost 50 per cent of exports and employed over 11 crore people.
"At this moment, without appropriate support, more than 6.3 crore MSMEs stand on the verge of economic ruin," she said.
Stating that every single day of the lockdown is costing Rs 30,000 crore to the sector, the Congress leader said nearly all MSMEs had lost sales orders, seen complete cessation of work, and had revenue negatively impacted.
"Most worrying of all, 11 crore employees are at the risk of losing jobs as MSMEs struggle to pay wages and salaries. The government needs to introduce a series of measures to meet this crisis head-on or risk a much large economic crisis down the road," she said.
She said the actions taken by the Reserve Bank of India (RBI) must get reflected in banks'' measures to ensure adequate, easy and timely credit supply to MSMEs.
"These measures need to be supported by an expansion and extension of the RBI''s moratorium on payment of loans for the MSMEs beyond the stipulated three months," she said.