Published On : Tue, Aug 25th, 2020

COSIA Urges Government to Extend Moratorium and Relief Period for MSMEs

Chairman of Chamber of Small Industry Associations Vidarbha Shri Mayank Shukla, informed that less than 40% industries under MSME sector are working to the extent of more than 50% of its capacity. Under these circumstances, the Industries particularly under micro and small category are facing numerous problems like funds liquidity crunch,migration of labour problems, procurement of further orders and execution of existing ones,supply chain,transportation and fulfillment of statutory compliances etc

Delayed payments from suppliers particularly from PSUs, Corporates and large scale Industries adds fuel to their woes.CA Julfesh Shah,Vice Chairman,COSIA said that although RBI has announced extension of moratorium upto 31st Aug 2020,still MSME sector is reeling under tremendous pressure & facing a stiff challenge to reasonably survive in this peak COVID period & in view of this the moratorium period on the financial facilities availed by them need to be further extended till 31st Dec 2020.Mr Shah further added that in the present situation if moratorium period is not extended it may lead to rise in the number of overdue accounts & eventually may increase NPA percentage considerably in the MSME sector.

Although number of relief packages are announced by the Govt.for MSMEs, but the situation has not improved to the extent desired.Under such situation it is urged by COSIA to the Finance Ministry & MSME Ministry that clearance of outstanding payments to micro and small level Industries needs to be done on topmost priority, otherwise several micro and small scale Industries are likely to be permanently closed thereby creating a huge job cuts and reduction in direct and indirect employment.

Shri Shukla has further urged the Goverment to expedite the release of relief offered to MSME sector.Simply relaxing norms do not help the actual beneficiaries but it only broadens the area of its scope.

It is also most earnestly urged that the Provident Fund relief granted by the Government needs to be further extended upto December’20. This relief of contribution of PF on behalf of Employers and Employees (Total 24%) has enabled employers with more liquidity and employees to carry heavier pay packets.This also improves the purchasing power of employees thereby creating demand in market and strengthening Nation’s Economy to certain extent.

COSIA has also humbly appealed to Government to remove the rider of eligibility criteria that is having an employment more than 90% drawing below 15,000/- per month.This will enable more number of beneficiaries to take its advantage.

CA Julfesh Shah said that in the present scenario when the Unlock 3.0 is half heartedly implemented that too by few states because of COVID-19 fear still persisting, it is utmost important to continue with moratorium and relief package for MSME sector till December’20 which will provide some solace to the under pressure trade & industry at large.