The first part of the financial stimulus measures announced by the union Finance minister will help in providing liquidity, prevent several small businesses from total closure and save hundreds of jobs, says president, ASSOCHAM and NAREDCO, Dr Niranjan Hiranandani.
“The first tranche announced today of the Rs 20 lakh crore package will revive demand back in the economy. These steps announced today will ensure continuation of smaller enterprises in the market by giving them funds to run the business,” he explained.
Dr Hiranandani explained that the MSME sectors were struggling with the working capital requirement to run their business since lockdown.
“With announcements like Rs 3 lakh crores collateral-free automatic loans for businesses, Rs 20,000 crores subordinate debt for stressed MSMEs and a Rs 50,000 crore equity infusion for MSMEs through fund of funds will pull the MSME sector from financial doldrums,” he pointed out.
According to Dr. Hiranandani, these measures would also help the companies to resume options needed to revive the economy.
“A lot of companies want to shift their operations to countries that are better prepared. India is one of the few countries that fit the bill. These measures would help get additional investments in the country,” he said.
He explained that the liquidity measures like the Rs 30,000 crore special liquidity scheme made in both primary and secondary market transactions in investment grade debt papers of NBFCs/HFCs/MFIs will help in providing funding to the real estate sector.
“Also the six month extension for RERA registered projects expiring on or after 25th March, 2020 will also benefit several developers in a scenario where construction work has come to a complete stand still. This would also prevent them from defaulting on their timelines,” he pointed out.
Dr Hiranandani stated that these measures which are a part of the Atmanirbhar Bharat Abhiyan or the self- reliant India campaign would boost investments in Make in India Projects post COVID 19 scenario.