“We request an additional 20 per cent loan under ECLG scheme for the industries by banks with a repayment period of six years to tide over the present economic crisis,” said MV Ramesh Babu, president of Coimbatore District Small Industries Association (CODISSIA) in a petition to Sitharaman.
The Centre sanctioned a 20 per cent loan to industries under ECLG scheme during the first COVID wave. But following the second wave, the MSME’s were under tremendous pressure from banks with regard to repayment of dues.
“Considering the present pandemic situation, we request the intervention of the Finance Minister to stop banks from pressurising the MSMEs for dues as business and cash flow has been seriously affected due to the escalation of COVID-19 situation across the country,” he added.
“The impact on the supply chain has in turn resulted in non-payment of dues to banks by the MSMEs. Also, the other factor for severe cash crunch is sharp increase in raw material prices. Hence, the first tranche of 20 per loan got eroded.To tide over the crisis, the moratorium period should be extended for another six months for both term loan repayment and interest dues,” said Ramesh Babu.