[ad_1]
“The second package could focus largely on MSMEs,” said a senior government official.
New Delhi:
A second stimulus package of $ 13 billion (Rs 1.3 billion) and focused on aid for small and medium-sized businesses that are out of the coronavirus outbreak, two senior officials said on Wednesday.
Last month, India outlined an Rs 2.26 billion economic stimulus plan that provides direct cash transfers and food security measures to help millions of poor people affected by a 21-day national blockade.
“The second package could focus heavily on MSMEs,” one of the top government officials, with direct knowledge of the plan, told Reuters, using an acronym for micro, small and medium-sized companies.
The official said a separate package could be announced for the larger companies after evaluating the extent of the coup they have faced due to the blockade imposed to combat the outbreak.
Small businesses account for almost a quarter of India’s $ 2.9 trillion economy and employ more than 50 crore workers, according to government estimates.
So far, India has recorded 5,274 cases of coronavirus, which has also killed 149 people in the country. The country is now considering reducing its blockade to coronavirus hotspots after the national blockade ends on April 14.
The media has been speculating that the government will soon announce more aid to help the struggling economy.
The new package targeting MSMEs could include increases in bank loan limits for working capital needs, lowering threshold limits to take advantage of tax exemptions, and relaxing rules for income tax deposits and other fees, sources said.
A spokesman for the finance ministry declined to comment.
The second government source said the government was also planning to partially erase tax refunds owed to small businesses within a month to provide immediate relief.
The government said on Wednesday that it will also release Rs 18,000 rupees in tax refunds to small businesses and individuals immediately and will impose spending restrictions on a number of departments for the period from April to June.
KE Raghunathan, former president of the All India Manufacturers Association (AIMO), said the government should also eliminate pending fees on the sale of its products to state and federal governments, as well as state-owned companies.
Federal and state governments and state companies owe more than 6.6 billion rupees to small businesses, the government told parliament last month.
“We don’t know how long we can survive if our quotas are not paid,” said Raghunathan, a small manufacturer of solar parts in the city of Chennai in southern India.
Hundreds of thousands of small private cash companies have deferred or cut their workers’ wages this month, while union leaders said more than five million workers, primarily contract workers, have suffered wage losses.
The industrial body AIMO, which represents about 100,000 small manufacturers, has said that more than two thirds of its members faced problems in paying wages.
