Congress Interim President Sonia Gandhi on Saturday has written to Prime Minister Narendra Modi and has given five suggestions to avoid an economic crisis in the country at the backdrop of the novel coronavirus pandemic.
Gandhi said that it is essential to highlight an economic concern that needs immediate attention and intervention. " If ignored, this issue has the potential of having a devastating and expansive ripple effect on our economy," she said.
Here are the five measures suggested by Sonia Gandhi:
1. Announce a Rs 1 lakh crore "MSME Wage Protection" package. "This would go a long way in shoring up the jobs, boosting morale as well as greatly alleviating the predicted economic spiral," she said.
2. Establish end deploy a credit guarantee fund of Rs 1 lakh crore. "This is necessary to provide immediate liquidity to the sector and ensure adequate eapttal is available to MSMEs at a time when they need it the most," she said.
3. Actions taken by RBI must get reflected in actions by commercial banks to ensure adequate, easy and timely credit supply to MSMEs. She adds, "Furthermore, any monetary action at the RBI's end must be supported by sound fiscal support from the Government. A 24x7 helpline in the Ministry to provide guidance and to assist MSMEs during this period would also be of enormous value."
4. These measures need to be supported by an expansion and extension of the RBI's moratorium on payment of loans for MSME beyond the stipulated period of 3 months. "The Government should also explore a waiver reduction of taxes for MSMEs and other sector specific measures," she adds.
5. High collateral security is leading to denial of credit. Same is the case with limits on 'margin money' being extremely high. "These factors combine to ensure a lack of access to available credit for MSMEs and must be addressed," she said.