Vijayawada: FAPCCI appeals for relief on term loans
Urges Centre to extend moratorium period to beyond three months for loans
Vijayawada: Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI) appealed to the Union Minister for Finance and the Minister for MSME and also to the RBI Governor to consider waiving of interest on term loans completely.
C V Atchut Rao, president of the FAPCCI, in a representation appealed for working capital facilities during the moratorium period and also to consider extending the loan term beyond three months moratorium period depending on the business need.
Recalling that the RBI has taken unprecedented measure of reducing the policy repo rate by 75 basis points to 4.4 per cent and reduced reverse repo rate by 90 basis points to 4.0 per cent, Atchut Rao also mentioned that while the RBI is taking accommodative stance to ease the financial stress, unfortunately the reductions in the rates are not passed on to the account holders, defeating the very purpose of the policy stance.
As part of the package the Central government proposed payment of 24 per cent of the monthly wages into EPF accounts for next three months, he said adding that the scheme is a welcome step as it leaves the employer with some money in his hands. "But the conditions for the eligibility to avail the scheme put more than 95 per cent of MSMEs out of the purview, thus providing marginal relief to the small businesses and industries."
If the conditions such as increase of wage limit to Rs 25,000 per month from Rs 15,000 were amended, more percentage of employees will be covered under the package. He appealed to the Union Ministers to consider applicability of scheme to organisations up to minimum of 200 employees in labour intensive sectors.
The FAPCCI president suggested to the government to utilise the ESI funds to pay wages for two months (April and May 2020) to the employees covered under ESI Act as the Act permits payment of 70 per cent of average daily wage for non-employment due to sickness. Since Covid-19 was declared as pandemic, the payment of wages for the lockdown period is justified.
He also appealed to the government to rationalise the GST rates into four categories: zero, five, 12 and 18 per cent slabs with no exemptions or compositions and full offset of Input Tax Credit which will help revive large job creators in the sectors of construction, auto and logistics businesses.
He hoped that these measures will surely benefit the industry and trade in particular the MSME sector.