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As the killer COVID 19 spreads in the county, the Reserve Bank of India and the government could look at easing norms relating to repayment of loans and non-performing assets (NPA) for companies, especially those classified as small and medium enterprises, which employ over 80 per cent of the country’s workforce. An announcement on this could be made by the end of this month.
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The Confederation of Indian Industry has prescribed relaxation of NPA recognition norms from the current 90 days to 180 days till September 30, 2020, to provide relief to industry faced with payment issues.
It has also sought a strong fiscal stimulus of about Rs 2 lakh crore for the “needy citizens” which may be directed through Aadhar-based direct benefit transfer or DBT. Besides, sources said that the country’s poor and daily wage earners identified by the Periodic Labor Force Survey of the Ministry of Statistics and Programme Implementation could be given “some financial assistance” much like the farmers’ debt waiver package. According to the PLFS data there are about 20 crore casual laborers.
“GDP growth could slide to below 5 per cent in 2020-21 if policy action is not taken urgently… Fiscal and monetary stimulus measures need to be announced urgently,” Chandrajit Banerjee, director general, CII, said.
The Federation of Indian Micro and Small & Medium Enterprises (Fisme) too has asked the government to immediately take the necessary action to arrest the impact arising out of the sudden hiatus in economic activities.
The industry body has said that no penalties should be levied for delay in filing returns both related to taxation and social security.
MSME exporters too are feeling the heat too with most borders shutting down and economies coming to a near shut down. Demand from the overseas markets has almost come to nil leading to closure of many units.
The CII has also pointed out the need for immediate monetary measures. It said that the RBI must reduce the repo rate—the rate at which RBI lends to the banks by 50 basis points along with a 50 basis points reduction in Cash Reserve Ratio (CRR). Central banks of the US, England, and China have already announced reduction of policy rates.
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