Lok Sabha Question No. 696 (UNSTARRED), answered on 2020-09-17
Subject: Revival Package for MSMEs
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Raghu Ramakrishna Raju Kanumuru, Kanimozhi Karunanidhi, Malook Nagar, D.K. Suresh, Abdul Majeed Ariff, Sarmistha Sethi, Behanan Benny

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 696

TO BE ANSWERED ON: 17.09.2020

## REVIVAL PACKAGE FOR MSMEs

696.           SHRI KANUMURU RAGHU RAMA KRISHNA RAJU:

SHRIMATI KANIMOZHI KARUNANIDHI:

SHRI MALOOK NAGAR:

SHRI D.K.SURESH:

ADV. A.M. ARIFF:

SHRIMATI SARMISTHA SETHI:

SHRI BENNY BEHANAN:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether the Government has initiated providing credit support to the MSMEs in the country  in  view  of  the  economic  slowdown  occurred  due  to  recent  lockdown  clamped  to control the COVID-19  in the country and if so, the details thereof;
- (b) the total quantum of assistance provided by the Government  for the MSME Sector as part of Covid Relief Package, State-wise;
- (c) whether any  form of  moratorium is  provided  for  MSMEs  who  availed institutional credit  and  which  are  established  within  3  years,  if  so,  the  details  thereof  and  if  not,  the reasons therefor;
- (d) whether  the  Government  has  announced  any  special  package  for  the  revival  of  the affected MSMEs and if so, the details thereof;
- (e) whether the Government has initiated any studies on the impact of the demonetization, GST implementation and COVID-19 pandemic separately on the MSMEs in the country and if so, the details thereof;
- (f) the number of workers who lost jobs due to the lock down in the MSME sector and number of MSMEs shutdown or closed due to COVID-19 lockdown; and
- (g) the details of the Government's recovery plans specifically to address the issues of the MSME sector?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NITIN GADKARI)

(a) to (d): As per RBI's Covid-19 Regulatory Package dated March 27, 2020, RBI had permitted  moratorium  of  three  month  on  payment  of  all  installments/  interest  falling  due between March 1, 2020,  and May 31, 2020. RBI, again, on May 22, 2020,  had extended moratorium on repayment of loans/ interest for another 3 months till August 31, 2020,  along with Asset Classification standstill during this period. (Total 6 months moratorium starting from  March  1,  2020).  In  addition,  RBI  vide  its  notification  dated  August  6,  2020,    on restructuring of advances related to MSME sector, has extended the one-time restructuring window upto March 31, 2021,  for the existing loans to MSMEs upto Rs. 25 crore, classified as 'standard' as on 1.3.2020,  without a downgrade in the asset classification.

Further, as per RBI's notification dated August 6, 2020,  on Resolution Framework for  COVID-19-related  stress,  in  respect  of  eligible  corporate  exposures  exceeding  Rs.  25 crore, the Resolution framework permits lenders to allow moratorium up to two years, as per their Board approved policy, depending on the merits of the case.

Moreover,  under  the  Atma  Nirbhar  Bharat  package,  Government  of  India  has announced Emergency Credit Line Guarantee Scheme (ECLGS) which will help the MSMEs in reviving their units. The credit facility under the ECLGS is extended as additional working capital term loans (in case of Banks and FIs) and additional term loan ( in case of NBFCs) to SMA-0 and SMA-1 accounts of eligible category  of  borrowers.  The  package  also  includes Credit  Guarantee  Scheme  for  Subordinate  Debt  (CGSSD)  which  seeks    to  provide  credit facility  through  lending  institutions  to  the  promoters  of  stressed  MSMEs  viz.  SMA-2  and NPA accounts that  are eligible for restructuring as per RBI guidelines on the books of the Lending institutions. The promoter would infuse the credit in the MSME as quasi equity or sub-debt.

(e) to (g): No formal studies has been conducted by the Government on the impact of the demonetization, GST implementation and COVID-19 pandemic separately on the MSMEs in the country. However, the Ministry of MSME  held a number of consultations with various MSME / Industry association of the country. During the deliberation, certain problems were highlighted  by  the  stake  holders  this  included  need  for  easy  finance,  more  liquidity, moratorium on loans.

*****