Register to Subscribe



Home arrow News arrow Business News arrow Economic Stimulus Package Working for MSMEs: Survey
Economic Stimulus Package Working for MSMEs: Survey Print E-mail
Written by Anand   
Wednesday, 25 March 2009
New Delhi: In wake of the present economic slowdown and the stimulus package announced by the Government of India, CII conducted a snap poll to analyse the impact of various initiatives, announced as part of the first & second  stimulus packages on the Micro, Small & Medium Enterprises (MSMEs). The findings of the snap poll revealed that as part of the First stimulus package, the Reduction in CENVAT by 4 %, followed by Interest rate cut of 0.5% for small and 1 % for micro enterprises by PSU banks, Export support by interest subvention of 2 %, Reduction in lock in period under Credit Guarantee scheme  from 24 to 18 months and Additional Plan Expenditure of Rs 20,000 crores, will  have a beneficial impact for the MSMEs.

Also as part of the First stimulus package the initiatives such as MSME sector refinance facility of Rs 7,000 crores, PSEs and Government departments to pay promptly to MSMEs, RBI Steps to ease liquidity by reducing repo, reverse repo and CRR, Public sector banks agreed to enhance working capital by 20% payable in one year with six months moratorium and extension of the Credit Guarantee from Rs 50 lacs to Rs 1 crores, would immensely contribute towards easing the liquidity for the MSMEs.

The snap pool also revealed that as part of the Second stimulus package,  initiatives such as restoration of DEPB rates prior to Nov 2008 till 31 Dec 2009, Duty Drawback benefits for certain products like bicycles, agricultural hand tools, and specified category of yarns with retrospective effect from 01/09/2008, assistance to state Government to purchase buses for their urban transport system and acclerated Depreciation of 50% for Commercial Vehicle purchased between 1 Jan’09 to 31 Jan’09, will  have a beneficial impact for the MSMEs. At the same time, initiatives such as Special Monthly meeting of SLBC to look into the matters between MSMEs and Banks not resolved within a fortnight, Enhancement in the Guarantee cover under Credit Guarantee scheme from 50% to 85% for loan up to Rs 5 lacs and Rs 5,000 crore RBI credit to EXIM Bank for pre and post shipment credit, would also contribute towards easing the liquidity for the MSMEs.

According to Mr Chandrajit Banerjee, Director General, CII, the last few months have witnessed a series of initiatives being announced by the Government of India, Reserve Bank of India (RBI), as part of the stimulus package, and supplemented with announcements by the Indian Banks Association (IBA), for the MSMEs. He added that clearly, the intent is to help the MSMEs with additional liquidity, in the midst of the current economic crisis.

Mr Ramesh Datla, Chairmanm,CII National MSME Council, mentioned that the present economic environment is even more global than when previous downturns hit, so there is enough reason to believe that concerted government action (globally) will make the reversal more shallow than predicted, although it could last slightly longer. He applauded the Governments effort through the stimulus packages, and added that CII had met and presented to the Hon’ble Prime Minister, Dr Manmohan Singh, a note on “Dealing with the Impact of Global Financial Crisis - MSME  Agenda for Indian Economy”, along with the representation received from 31 associations, from across the country, during December, last year.

 
Related news
More recent
Earlier on
< Prev   Next >

Sponsors

Mazak - The world's largest machine tool builder
JYOTI - India's most dynamic machine builder
TaeguTec - Cost effective tooling solutions
Advertisement

<< SHARE

Social

AD

Subscribe

Subscribe to MACHINIST by Email

Search

 
RSS 1.0
© 2014 MACHINIST
This site is best viewed with Firefox 2.0 or higher at a minimum screen resolution of 1024x768