20 APR,2020 | MEDC
The extension of the national lockdown to May 3 has hit hard India’s economy, particularly its MSME sector. This sector accounts for about 40% of exports and almost a third of national output as well as being the single largest contributor to skilled employment in the country. SIDBI announced emergency loans at a concessional rate of 5%, but only for MSMEs manufacturing products or delivering services to fight Covid-19. RBI also announced a three month moratorium on repayment of term loans. Additionally, RBI probably needs to suspend asset classification norms for MSMEs for some time. After all, this is an unprecedented situation where every sop matters. Much more needs to be done, and soon. RBI and the Finance Ministry need to astutely coordinate their efforts to prevent an impending socioeconomic disaster. Governments at state and central levels must work together to monitor developments and evolve strategy on an ongoing basis. This is one battle we cannot afford to lose.
*Photo Credit: Google