Admitting the the issue of pending payments to Micro, Small & Medium Enterprises was a serious problem that was starving these units of vital “oxygen”, Union Minister of Road Transport & Highways and MSMEs Nitin Gadkari said that enforcement of clearance of dues within 45 days would be strictly implemented to ensure that these units stay solvent amid the Covid lockdown distress.
Speaking at The Indian Express e-Adda event Monday, Gadkari said that while it will be difficult to get the migrant workers, who have left, to return to manufacturing hubs such as Gurugram and Pune in the short-term, the need to create “confidence in their minds” to return was essential.
Acknowledging that the vehicle scrappage policy that he had piloted is hanging fire for nearly two years, the Union Minister said that he was making a renewed push for the policy to offer a much-needed impetus to the automobile sector. The move is expected to place a cap on the life of vehicles in terms of years or kilometres run and ensure that old vehicles are periodically phased out.
“Centre and central PSUs will clear all pending MSME dues in 45 days. I have also requested other firms to clear pending dues of MSMEs as all capital is working capital for them. Working capital is like oxygen for them,” Gadkari said.
The total outstanding payments to units in the MSME sector was pegged at upwards of Rs 5 lakh crore, which is split between central ministries and departments, state governments, and public sector units under the Centre and states, as well as payments owed by downstream industries.
Following the lockdown, MSMEs have been among the worst hit due to lack of orders. While the government has announced a bevy of measures, including collateral-free automatic loan worth Rs 3 lakh crore, most MSME enterprises had sought clearance of dues to help them tide over the crisis.
Industries, including in the auto ancillary sector, which are among one of the largest employment generators, have been voicing concerns over the possible shortage of workers when the lockdown ends. Gadkari, however, cautioned against accepting the idea that all such units were dependent only on migrant workers.
“When the atmosphere is conducive, I am sure they will come back from homes to workplaces. We have to create confidence in their minds. In due course of time, they will come back when things normalise,” he said.
Gadkari also said that the aim of the government would be to protect local firms by ensuring “an Indian alternative for Chinese imports”. “We should protect. Duty should be imposed on Chinese goods. I have requested the Commerce Ministry,” Gadkari said.
The e-Adda was moderated by Anil Sasi, National Business Editor, and Ravish Tiwari, Political Editor.
The Express Adda is a series of informal interactions organised by The Indian Express Group and features those at the centre of change. Former Chief Economic Advisor Arvind Subramanian and AIIMS director Dr Randeep Guleria were recent guests at the e-Adda.
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