Stimulus Package Announced by the FM Encouraging in Medium Term; however boost to demand, supply chain and bailout of overall trade and industry is the immediate need of the hour, says FIEO President

Responding to the overall economic package announced by the Hon’ble Finance Minister Ms Nirmala Sitharaman, FIEO President Mr Sharad Kumar Saraf said that though the overall stimulus package announced by the government has been encouraging and help in medium to long term, however there still remains concerns with regard to stimulating demand and tackling supply & supply chain disruptions which would have been the key to giving boost to the overall trade and industry immediately during such challenging times.

FIEO Chief added that though the government is working on a mission mode on the next phase of ease of doing business reforms relating to easy registration of property, fast disposal of commercial disputes and simpler tax regime for making India one of the easiest places to do business and to attract Foreign Direct Investments and making India both Manufacturing and Export Hub. The need of the hour was to provide a much needed bailout package both in the form direct and indirect incentivisation for the trade and industry especially the exports sector looking at the global scenario, said Mr Saraf.

Raising of threshold to initiate insolvency proceedings to 1 crore from 1 lakh for MSMEs besides suspension of fresh initiation of insolvency proceedings up to one year depending upon the pandemic situation and empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the code for the purpose of triggering insolvency proceedings, Mr Sharad Kumar Saraf said is a welcome step and will help MSME units now falling under category to cope with the business environment emerging during these times.

Further initiatives taken on decriminalization of companies act violations, ease of doing business for corporates, public sector enterprise policy for a New and Self-reliant India and increasing of state borrowing limit from 3 to 5 percent apart from other reform measures will also go a long way in improving the business climate in the country, reiterated FIEO President.

Mr Sharad Kumar Saraf further urged the government that the revised definition of MSME should ensure that none of the existing MSMEs lose their status. Therefore, if one of the twin criteria is breached, the unit should continue as an MSME. He also demanded that the exports may be provided additional MEIS of 2% across the board and 4% for labour-intensive sectors and implementation of the new RoDTEP Scheme to help the exporters in such difficult times. Government should allow roll over of forward cover without interest and penalty and automatic enhancement of limit by 25% to address liquidity challenges, besides creation of the much-awaited Export Development Fund for marketing of Brand India products across the globe, added Mr Saraf.

With the cancellation of about 70-80% of orders casting a gloomy picture besides major job losses and rising NPAs amongst exporting units, he urged for immediate announcement of an export package covering above and implementation of the economic measures announced at the ground level for quick and early starting of trade and businesses across the country during such difficult and testing times.