SME Times News Bureau | 18 May, 2020
Commenting on the fifth and the final tranche of
announcement on Atmanirbhar Bharat economic package, FICCI said that the extra
room given to state governments for market borrowings will help them discharge
their responsibilities effectively in this difficult phase and was one of the
most striking features.
The additional boost of Rs 40000 crore towards MGNREGS above
Budgetary estimate will help provide work to the those who have returned to
their homes and also support rural demand.
The announcement by FM on ensuring that management of
companies do not have to unduly stress about the company being dragged into
insolvency and liquidity proceedings for non-payment of debt owing to economic
losses incurred during the lockdown is a welcome move and will help assure
business continuity. Focus can now be on getting back on track. This meets
industry request for a breather for a year. A Special dispensation under IBC
for MSMEs will protect such companies from being liquidated due to the
pandemic.
FICCI also welcomes Government's decision to amend the
Companies Act, 2013 to decriminalise bona fide defaults under the Act through
the Ordinance route, which would help companies to take benefit of this
provision immediately.
The move to decriminalise non-compliances of minor,
technical or procedural nature will further the objective of Government to
facilitate and promote ease of doing business in India and increase India's
attractiveness as an investment destination and also provide relief to foreign
investors from protracted litigation in cases of technical and procedural
defaults.
Similar decriminalisation provisions should be extended to other
legislations that impact businesses. FICCI has been working with Government
towards this objective.
Direct listing on foreign stock exchanges is again a
long-standing FICCI demand. It will help companies in new business areas and
start-ups raise money from evolved financial markets.
Reforms in Public Sector Enterprise policy and giving more
space to private sector even in strategic sectors is a very bold measure and in
long run will have very positive impact on the economy. We look forward to the
list of strategic sectors as indicated by Finance Minister.
While these measures will surely help the economy in medium
to long term, FICCI is hopeful that government will consider measures to
support battered segments of industry including tourism, hospitality, aviation
and healthcare. FICCI has requested that a minimum amount of Rs 20,000 crore be
allotted for these sectors as they have seen maximum dip in demand and will
also take much longer to recover from the set-back seen.
Private Healthcare sector also needs huge impetus in order
to build capacity to fight the COVID-19 menace effectively. The sector is
trying to make its contribution but needs support to sustain its efforts.
The government also needs to plan for more support for the
migrant workers and the more vulnerable sections of society.
Finally, large corporates have also been significantly
affected. FICCI has recommended a need for COVID liquidity bridge for providing
guarantee to banks to give them comfort to restructure/ extend loans to
companies whose balance sheets have been impaired due to COVID-19. Government
needs to provide an amount of Rs 10,000 crore in first year towards this, which
is a small amount of support needed but can have significant impact on
companies and economy.