A Parliamentary Standing Committee on industry in its report on wednesday said the stimulus package announced by the central government last year has proved to be inadequate for the country's economic revival. The report is tabled in the rajya sabha today. The panel recommended that the Modi government should immediately announce a larger package for economy aimed at bolstering demand, exports, investments and employment generation to help the micro, small and medium enterprises recover from the pandemic fallout.

The panel recommendations carried out a study on the losses suffered by MSMEs to chalk out an effective revival plan. The committee stated that several central public sector enterprises, central ministries, and government departments had not cleared the dues of MSMEs within 45 days. The panel also suggested that on such delays one percent penalty clause should be used to encourage timely payments.

To reduce the stress caused by the pandemic induced lockdowns, the government earlier announced Emergency Credit Line Guarantee Scheme(ECLGS) worth a Rs 3 lakh crore for MSMEs, which was a part of the stimulus package (Aatmanirbhar Bharat Abhiyan) worth RS 20 lakh crore announced last year. Later the amount to be guarantedd was hiked to Rs 4.5 lakh crore last month.

The ECLGS provides 100 percent guarantees to banks, lending institutions and nonbanking financial institutions to enable them to advance loans to firms which suffered losses because of pandemic and are struggling to meet the working capital requirements. MSMEs are having a four-year repayment period and a one-year moratorium period, which the analysts are saying are not enough.

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Stimulus package for economic revival 'inadequate': Parliamentary panel

Shaik Abdul Sammad

28/07/2021 06:12 PM