Odisha Small Scale Industries Association (OSSIA) has appealed to the prime minister to declare packages in banking and finance
Reeling under the impact of the coronavirus
(Covid-19) pandemic, 80 per cent of micro, small & medium enterprises (MSMEs) are running the risk of closure and have sought relief from Prime Minister Narendra Modi.
As a fall-out of the nationwide lockdown, the small and micro scale industries in the state are facing severe hardship. In the absence of manufacturing activity, there is no cash flow, while the credit cycle has been badly affected.
Small Scale Industries Association (OSSIA) has appealed to the prime minister to declare packages in banking and finance. The body has suggested that the moratorium announced by the Reserve Bank of India (RBI) on EMI (equated monthly instalments) repayments should be applicable for six months from the month when the lockdown was declared. Besides, MSMEs
should be given the leeway to make these pending payments in 24 instalments without interest or penalties.
“We appeal to amend IRAC (Income Recognition & Asset Classification) norms for declaring NPA from 90 to 270 days as recovery of payments from debtors is totally in a mess in the present situation and is likely to continue to be irregular for sometime even after the lockdown is lifted. We also demand complete waiver of all bank charges, fees and interest on all types of loans and advances availed by the MSMEs
with effect from March 1, 2020 till resumption of normal production. Both public sector and private sector banks should unconditionally enhance the cash credit and working capital limits of all MSMEs
by 25 per cent of present facilities availed by them for a period of two years with low rate of interest”, Smarajit Mohanty, president of OSSIA wrote to the prime minister.
He said that since most of the micro units in Odisha
run their businesses with 8 to 9 labourers, it is not feasible for them to pay wages and ESI dues at a time when all activities have come to a grinding halt. OSSIA has recommended to the Centre that the absence of employees due to Covid-19 induced lockdown may be treated as ‘medical absence’ and salaries to be paid to those, who are insured under Employees’ State Insurance Corporation (ESIC), till the time these units resume production. For employees not registered under ESC, state governments can reimburse payments from the respective Labour Welfare Funds.
That apart, the central government, state governments, semi-government organisations and PSUs should be directed to release all outstanding payments immediately to the MSMEs, Mohanty suggested.