CITI hails decisions of Union Cabinet for Boosting MSMEs, Farmers, Street Vendors and Agriculture Sector

New Delhi, Monday, 1st June 2020: Shri T. Rajkumar, Chairman, CITI welcomed the decisions of the Union Cabinet chaired by the Hon’ble Prime Minister of India, Shri Narendra Modi which will provide the economic support for MSMEs, Farmers, Street Vendors and Agricultural Sector. He stated that MSMEs, Farmers and Agriculture Sector are the backbone of the Indian economy and growth of these sectors is the growth of the overall economy.

Shri Rajkumar appreciated that MSMEs which has 29% share in the country’s GDP and 48% share in the country’s exports and provide employment to millions of people, will receive maximum benefits from the change in the definition of MSME under which turnover limit for medium enterprises has been revised upward to Rs 250 crores from present Rs 100 crores, as announced earlier. Under the new definition, the distinction between manufacturing and services enterprises has been eliminated.

CITI Chairman pointed out that in the revised definition, even small weaving mills may be able to come and because of this many garment manufacturers will be benefited. He further stated that the Centre’s revision in the definition of MSMEs will give MSMEs the much-needed confidence to grow and will promote its seamless expansion in the country.

Chairman, CITI also welcomed the decision of Distressed Asset Fund of Rs 4,000 crore created to help weaker MSMEs that are struggling through NPA norms due to the outbreak of COVID-19 Pandemic and this fund will bring them back into the business and they can start the business activities afresh with the help of this fund. Further Rs 20,000 crore subordinated debt for stressed MSMEs is likely to benefit 2 lakh stressed MSMEs.

Shri Rajkumar felt that this is the first time when the Government has given so much importance to the MSME Sector. He further stated that the Government’s announcement of Rs 10,000 crore funds for MSME to get listed in the stock market is a welcome measure. He pointed out that as Shri Nitin Gadkari stated that along with the other investment, this fund will reach Rs 50,000 crore and more funds from the market to MSMEs-Listing in the stock market will make MSMEs attract more funds from the market and this will boost the MSME Sector to enhance its reach to major destinations.

Chairman, CITI also appreciated the decision of Rs 10,000 one-time loan to be disbursed to 50 lakh street and footpath vendors which can be returned in one year. He also welcomed the decision that Farmers will be benefited from reduced loans of Rs 3 lakh by 2% which will be disbursed till 31 August 2020 and those farmers who will repay their loans timely till August 31, 2020, will get a 4% waiver on their loans.

Mr Rajkumar appealed to the Government to consider industry’s urgent demand of extending the moratorium for repayment of loans and interest up to 31st March 2021 and extend 25% additional working capital without any collateral or margin money for all the categories of accounts other than MSMEs also.  He has also hoped that the Government would consider T&C Industry’s demand for one-time debt-restructuring which can solve many financial related problems of the T&C Sector.

CITI Chairman also felt that the Government would soon announce a special package for boosting exports for all the textiles & clothing products including cotton yarn and fabric to grab the emerging opportunities and also consuming the surplus cotton that might significantly affect the cotton farmers in the country.

Chairman, CITI concluded by saying that though the revised upward limit for the medium enterprises to Rs 250 crores excluding exports from Rs 100 crores, as announced earlier, will certainly boost many companies which were not able to come under MSME category, however, in order to encourage technology up-gradation and scale of operation in the textile sector, the condition of “investment and sales turnover” needs to be modified as “investment or sales turn over’.  He hoped that the capital intensive textile sectors like spinning, independent weaving, processing, etc, will also get the much needed economic package to tide over the ill-effects of COVID-19 pandemic situation.