- After 20th April with the ease for industries in lockdown, cashflow can be a major problem for industrial units.
- Dues of MSMEs need to be clear from the government to work with efficiency.
- Facilitating Cell for MSMEs is a call for action to help the economy and industries.
- India is expected to have 1.9% GDP rate because of services.
- Industries are seeking for help in electricity wavier.
Lucknow, 17th April, 2020: Federation of Indian Chambers of Commerce and Industry (FICCI) organized an exclusive webinar on 17th April 2020 upon to discuss the roadmap for facilitation of MSMEs during and after COVID-19.
In the forum of discussion Mr. Navneet Sehgal, IAS Principal Secretary MSME Department Government of Uttar Pradesh, Mr. Sharad Jaipuria, Chairman of UP State Council & CMD of GINNI International Ltd, Mr. Janak Kumar Bhatia, President Laghu Udhyog Bharti, Mr. Pankaj Kumar, President of Indian Industries Association, Mr. Manoj Gupta, Member FICCI & CMD MKU Ltd, Mr. Adil Zaidi, Partner and Leader in Economic Development & Infrastructure Advisory, ERNST & Young LLP and Mr. Amar Tulsiyan, Founder & Partner of NIINE sanitary napkins were present.
This platform of discussion catered to all industrial related queries of MSME sector that contributes to around 30% of India’a GDP, and is based on conservative estimates and employs around 50% of industrial workers. Keeping the present situation of the state in mind because of COVID-19 IAS Principal Secretary MSME, Shri Navneet Sehgal discussed and welcomed the perspectives and suggestions from Industry Captains and Corporates for the facilitation of MSMEs.
MSME Department, Government of Uttar Pradesh, IAS Principal Secretary, Shri Navneet Sehgal said, “The government of India and the state of UP are taking proactive measures to address all the issues of industrial units which can have an impact on economy especially, the issue of cash flow have been already considered and we are working on it because after 20th of April 2020, industries could find difficulty in starting the process because of the problem of cash flow.
Among all the suggestions contributed in this forum of discussion, the idea of a window of facilitation cell has attracted and we will come up with this to prevent all the misunderstandings of the guidelines at the local level which will also help to focus on the problems of MSMEs but we have some Control Rooms even in Lucknow, so if any industrialist or MSME is facing any issues they can reach us out through the control rooms already established.
We have even already suggested to the govt of India about the bank limit which should be extended to ensure the cashflow. In addition to this, GST refunds and MSME due payment’s will also be reviewed to clear the dues of industries from the concerned departments.
Discussing about the point, he said, “In campus facility and accommodation for labors should be given by the industries and every precaution needs to be acknowledged such as thermal scanner, social distancing should be practiced also educate your workforce and notify if in case any workers feels sick or has health issues. This should be the industry’s responsibility to sanitize the campus. And just to add, it has been done that 25% procurement will be done by the government will be from UP with price preference.”
Chairman of UP State Council & CMD of GINNI International Ltd, Mr. Sharad Jaipuria said, “MSME is the backbone of industrial and has contributed to rural sector with 2crore manufacturing units with 14% share in UP and 30% contribution in GDP long with 50% of workforce. Global GDP is at -3%, Asia’s economy growth is 0% and India is expected to have 1.9% GDP rate because of services and China at 1% only. We hope government of India package to help marginalized sector, trade and MSMEs by 15 to 20%. We need support in salary, wages, and Electricity bills.
In this time of crisis it is expected that 40%-50% MSMEs will disappear and the industrial units need help in electricity wavier and dues of MSMEs should get clear by the State government.
UP government cell is also demanded to facilitate MSMEs by monitoring at the Bank, Regional and community level for proper circulation of information to all MSMEs and to ensure that the guidelines given by the authority have been followed with any trouble on ground level. Financial support is also demanded for one of the major concern of the industrial units that is the bringing back of workforce to their units.”
Member of FICCI & CMD MKU Ltd, Mr. Manoj Gupta said, “These are the difficult time with an uncertain and unpredictable economy status, and we are even unable to plan the recovery of economy. There are some major concerned areas which are need to be focused on the industrial front which is to ensure the match and maintenance of the cash flow, procurement of raw material because the transportation rates are very high, supply chain is also not functioning smooth which will need a lot of effort to be back on the track and availability of labors is an another major gap as well. Hence, it is requested to the government to review all these concerns of MSME and other industrial units and the Act which was made for big industrial units and MSMEs should be followed strictly so that the large industries return money to the ROC registered MSMEs as mentioned in the provision.”
Laghu Udhyog Bharti, President, Mr. Janak Bhatia said, “Laghu Udhyog Bharti has always been helpful towards the industry to motivate them. After talking to the industry people, the major issue which was seen common is the salary issue. March salary has been paid to the workers but there will be difficulty in the April wages. The workers should be considered under the medical leave under ESIC registration which will prove to be of great help. Only minimum electricity bills should be charged as electricity is not being used at all. Also, I suggest that labors should be asked to work as soon as possible to contribute towards the economy.
Indian Industries Association, President, Mr. Pankaj Kumar said, “The Indian Government has taken good steps with time to get rid of COVID-19 crisis. There is a lot of liquidity crisis going on in the MSMEs as there is no work going on, no workers are available and also no production and selling. A survey has been done with the IIA members where we found out that 90% of the units have been closed, 72% of them have not got any help from the bank amid guidelines. And if in such a case, whatever money has been stuck in the PSUs will be of great help if gets cleared. 90% of the small and medium scale industries have mentioned that they will not be able to pay the April wages to their workers. Without the support of the government only 30% of the wages can be given to the workers but not beyond that. Post COVID-19, at least 6 to 12 months minimum will be required by any MSME to stand and start again. Each industrialist should also get tested by the ESIC doctors.
Partner and Leader, Economic Development, Mr. Adil Zaidi said, “If there is a lockdown of 4 weeks then 22% of the MSMEs will shut down and we have already started with the 4th week. Set-up of state and district level control rooms has been done where state-level control room comprises of Joint Commissioner level officials and headed by Principal Secretary along with 6 officials who will ensure the proper supply of raw materials. Also, issues related to labour passes have been resolved for 5471 MSME units. 61 new units provided with drug license to manufacture medicines and 40 new units were provided with required license to initiate production of hand sanitizers. Some of the major industry related initiatives have been also taken by the govt such as activation of district industries Centre, E-Pass system has been introduced, Shamik Bharan- Poshan Yojana, Supply Mitra, Annapurna, Migrant labour crisis management and Fixed/ demand charges.” Some of the major industry related initiatives have been also taken by the govt such as activation of district industries Centre, E-Pass system has been introduced, Shamik Bharan- Poshan Yojana, Supply Mitra, Annapurna, Migrant labour crisis management and Fixed/ demand charges.”
Founder & Partner, Co Chairman of NIINE Sanitary Napkins, Mr. Amar Tulsiyan said, “ In this point of time we all know that the use of essential goods have been done on a large scale and now the need of the hour is to focus on it which can affect the working of industrial units. Relaxation is requested on custom duties and EMIs and one panel is also required to review the system and support MSMEs as well as employment.”