Written by Sandeep Ashar | Mumbai |
Published: May 18, 2020 5:26:16 am
Small businesses in Maharashtra may soon get a three-month electricity duty waiver. After the declaration of the Centre’s economic package for the micro, small and medium enterprises (MSMEs), Maharashtra, India’s most industrialised state, is planning to roll out further measures to protect and restore the sector in the state.
A senior official said the Uddhav Thackeray-led government plans to announce a three-month waiver of fixed monthly electricity charges payable by the MSMEs to cushion the economic damage caused by the lockdown. “The proposal is to waive charges payable by these units between March and June,” the official added.
The government is also examining whether the same concession can be extended even to large industries. “We will either include them in the waiver package or announce deferment of payment in their case,” said another official.
Maharashtra has 17 lakh registered MSMEs that provide direct and indirect employment to nearly 1.5 crore people. Of this, the manufacturing sector, among the worst hit by the lockdown, alone accounts for six lakh units.
As per the state’s initial estimates, the concession will cost the state exchequer around Rs 800 crore. Meanwhile, in a sop for the construction sector, the state is expected to announce concessions in stamp duty payable on purchase of a new apartment from a builder.
The Centre, in its stimulus package for the sector, had declared that until October 2020, MSMEs can avail an additional collateral free automatic loan with a 10-month moratorium. It has also announced an employee provident fund support scheme for three months for eligible small businesses, besides permitted two lakh stressed units to avail subordinate debt worth Rs 20,000 crore in all.
Based on the Uddhav-appointed expert panel’s recommendations, the government is also planning to bear up to five per cent interest of fresh capital loans availed by MSMEs for a one-year period.
As reported earlier, the state has also taken up a proposal for protecting the wages of employees of the MSMEs. On the condition that 100 per cent staff will be retained on existing salaries, MSMEs are likely to be offered an ex gratia assistance covering about two months of basic wage of the staff. On the line of the Centre’s announcement, state departments and corporations will be directed to clear all payable of MSMEs within the next couple of months.
Finance Minister Ajit Pawar had earlier hinted that the state’s economic revival package will soon be rolled out after discussions held by the Cabinet. A ministerial sub-committee for economic revival had last week deliberated on the recommendations made by the expert panel.
On Sunday, state Industries Minister Subhash Desai, while interacting with industry heads in a webinar, had announced that the government had so far permitted nearly 70,000 units to resume operations. Indicating that industrial activity was beginning to revive, Desai also said that about 50,000 of these units had already gone into production.
The minister further rooted for the bouquet of sops already offered by the Centre to the industries, urging units in the state to leverage these to attain normalcy at the earliest.
Sources said that Maharashtra is also planning to dole out cash assistance to poor and vulnerable groups, including street vendors, drivers, electricians, domestic helps and self-employed services providers. The Centre has announced a free foodgrain scheme for non-ration card holders and offered credit up to Rs 10,000 for streetside vendors among other initiatives.
‘Reform link, GDP shrinkage may hurt borrowing’
While welcoming the Centre’s decision to enhance borrowing limits of state from three per cent to five per cent of the Gross State Domestic Product (GSDP), state bureaucrats are of the opinion that the Centre’s move to link reforms with the release of the amounts might hurt borrowing. The Centre has unconditionally increased the limit by 0.5 per cent, but for the remaining 1.5 per cent, release of each tranche is linked to a measurable reform. The state also wants the Centre to consider last year’s GDP size for fixing the revised borrowing limits. It has projected a 50 per cent decrease in the current year’s GDP.
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