After Finance Minister Nirmala Sitharaman announced a slew of measures for MSME sector, Discoms, contractors and EPF, the Congress said the focus of the economic package is “debt creation” and not “demand creation”.
Congress spokesperson Jaiveer Shergill in a statement, said, “Rs 20 Lakh Cr Package announced by FM is a ‘Loans Marketing Brochure” rather than a “Relief Oriented Rescue Plan.”
He said that the focus of package is “debt creation” and not “demand creation” -clearing of receivables & tax refunds is not stimulus – Govt misleading by Repackaging loans & dues as Relief.
Among other measures for MSMEs, Nirmala Sitharaman also announced a collateral free automatic loans for businesses including MSMEs up to Rs 3 lakh crore.
Under the measure, borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover would be eligible for the special collateral free loan.
Further, the government has also done away with the distinction of services and manufacturing MSME.
As per the new changes, businesses with investment of less than Rs 1 crore and turnover of Rs 5 crore would be classified as micro enterprises. Under the existing criteria, a company with investment of less than Rs 25 lakh in the manufacturing sector and less than Rs 10 lakh in the services sector were considered micro enterprises.
The measure is a part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday evening.