They generate 30% of India’s GDP
Medium and Small Medium Enterprises (MSMEs) are facing acute cash crunch due to the slumping demand and lockdown. MSMEs generate about half of India’s exports and one third of India’s Gross Domestic Product (GDP).
Jairam Ramesh is an economist and a politician. He requested the government for a relief package of INR 100,000 crore for MSMes. The biggest challenge is to pay the wages. The existing relief package does not cover about 99% of MSMEs, as they have less than 5–10 workers. He suggests payment of pending bills, restructuring of loans, ad-hoc working capital loans, advance for exports, tax and wage credits, cash transfers for self-employed, re-opening industries for ‘work from home’. The list also includes extending the financial year, deferring tax payments by six months, and waiving local bodies taxes and service tax along with relaxation in NPAs.
Also, in March 2019 he had raised the issues of MSMes: Today I asked @nitin_gadkari to address the following on the working of Ministry of MSME:
What is the real impact of demonetisation & GST on MSMEs? How are we dealing with its fallout?
Definition of MSMEs needs to be changed according to turnover
The need for a completely new Insolvency & Bankruptcy mechanism for MSME sector by amending the MSME Act, 2006
Delayed payments, esp by PSUs & govts is the single biggest issue for MSMEs. What steps will the Minister take to address this?
What are we doing for cluster development? It requires technology, infrastructure & finance. We should have Smart Clusters instead of Smart Cities.
Can the Minister modernise and give a new direction to KVIC & traditional industries crucial for exports & employment
Will the govt accept and implement the recommendation of the 2019 UK Sinha Committee on MSMEs?
About 11 crore people work in MSMes. Economist Raghuram Rajan suggests that government should care about reviving the economy as much as it is careful about stopping the transmission of Corona virus. He suggests government to provide funds to MSMes for the survival.