The central government has announced a stimulus package to revive the impacted industries amid this lockdown. The 20 lakh crore economic package is said to be the 10% of total GDP. As per Prime Minister Narendra Modi, this package is aimed at making India self-reliant and rescue the economy from downfall. Finance Minister Smt. Nirmala Sitharaman announced the further details about the strategies of government for utilizing this amount for reviving the financial infrastructure of the country. As per FM, government will use this amount to aid the employees and employers, businesses, Micro Small and Medium Enterprises (MSMEs), Non-Banking Finance Institutions (NBFCs), Housing Finance Companies (HFCs), Micro Finance Sector and Power Sector. Industry leaders across market was overwhelmed with this announcement and shared their response with Digital Terminal. Check the opinion expressed by these leaders in the post below:

Yogesh Bhatia, Founder, and CEO, Detel commented, "We welcome the move of 'Atma Nirbhar Bharat' Abhiyaan by Shri Narendra Modi promoting the idea of ' Vocal for Local'. Detel understood the opportunity this pandemic has brought with it and entered into PPE Space in order to make the country self-reliant. With the Government encouraging home-grown brands like us, we are sure that India in the coming time will be the hub of innovation and manufacturing, and will be the center of attraction for Investors. " 

“The 20 lakh crore economic package will definitely give the impetus to the economy, industry and society; however, as every business is thinking of re-inventing itself to be future-ready, it is our responsibility as a country to define that ‘re-invent India’ strategy, define the role of each of the pillars (economy, infrastructure, technology-driven system, vibrant demography and demand) laid down by the government, break down old policies and re-write collaboration between the private and public sector” said CP Gurnani, MD & CEO, Tech Mahindra. “The government is playing the role of an investor to create physical and digital infrastructure, create global standard academic institutions in Artificial Intelligence and data science, nurture local firms to create telecom infrastructure, cyber security global leaders. There was an independence in 1947; now that the fuel has been provided, let’s make 2020 the year when we get independence from a non-digital world to make India truly a global digital leader in every aspect, so that both, the common man and businesses from India come out resilient and self-sufficient.” 

“We as an MSME appreciate and welcome the relief package announced by our finance minister. We look forward to the relaxations that were suggested today, and are quite hopeful that the relief will definitely help in abating the economic severity of the corona pandemic, and will act as a stimulus to revive the economy” added Ashok Rajpal, MD, Ambrane India. 

Manoj Kumar Nambiar, MD Arohan & Chair MFIN said, "The first measure with full guarantee for INR 30,000Cr and the second one for INR 45,000Cr with 20% partial guarantee for NBFC,HFC & MFI's is path breaking from the government of India. For us as MFI's it is a clear recognition of the fact that we can impact over 300 million lives at the Bottom of the Pyramid by reaching credit where it is required the most when India rebuilds itself as mentioned by the hon'ble PM himself." 

Chet Jainn, Founder & CEO, Crowdera stated, “What a thoughtful package to support the MSME, very clearly defined support system of all categories of MSME. This will indeed offer a great relief to the sector and may also push the economy when we are ready for the post covid world.” 

Dr. Vishwakumara Kayargadde, Founder and COO, Saankhya Labs said, “The measures announced by the Government of India come as a much needed relief to the MSME sector that has been going through a difficult time since the onslaught of the COVID-19 outbreak. Today’s announcement by the Finance Minister of providing Rs. 3 lakh crore collateral-free automatic loans for MSMEs, will help companies tide over the uncertainty that has arisen due to the extended lockdown. Also, stressed MSMEs can take advantage of the Rs. 20K crore subordinate debt announced today as this will help sustain their business and boost growth. While the government has given a thrust to manufacturing through its flagship ‘Make in India’ programme, the new steps announced will promote local companies to manufacture their products within the country. This will also help ramp up investments in the MSME sector and incentivize companies to build a local ecosystem. That said, the measures announced today will go a long way in providing a much needed fillip to the economy and allow Indian companies such as Saankhya Labs to develop innovative and technology-driven solutions locally which can be exported globally.” 

Kishan Jain, Director, Goldmedal Electricals said, “We welcome the move by the Government of India on providing much needed relief to industry through the INR 20 lakh crore economic package announced. Finance Minister’s plan of providing INR 3 lakh crore collateral-free automatic loans for MSMEs will provide much needed line of credit to the sector that is currently under strain due to the COVID-19 lockdown. Additionally, the INR 20K crore subordinate debt for stressed MSMEs will provide a much needed shot in the arm and will help these companies get back on their feet. By changing the way MSMEs and SMEs are defined through the increase in the investment and turnover limits, it will enable them to gain the benefits that the Government provides. All of these measures will definitely ease the financial burden of this sector and boost growth and expansion. It will also invigorate MSMEs by investing in building innovative products and services that will give further boost to Aatma Nirbhar Bharat Yojana announced by PM Modi yesterday and give a much needed fillip to India’s economy post the lockdown.” 

“During the current COVID-19 lockdown, we applaud the timely and strategic announcements made by the Government of India in the form of the INR 20 lakh crore economic package. With MSMEs being at the center of the storm, the INR 3 lakh crore collateral-free automatic loans announced by the Finance Minister will provide a timely line of credit to these companies, helping them tide over the crisis sooner. Additionally by redefining what constitutes an MSME through the increase in their investment and turnover limits, we will see a lot more organisations benefiting from the Government’s schemes. What is even more inspiring is the INR 20K crore subordinate debt for stressed MSMEs, which will provide these companies with adequate time to stabilize themselves in midst of a challenging economic situation. We believe that all of these measures together will not only ease the financial burden of these enterprises but also pave a way for business growth, expansion and innovation. This in turn will help India get back onto its feet and continue its high growth trajectory in the years to come" added Kunal Lakhara, VP of Finance and Operations, Pocket Aces

“India’s MSMEs sector is the largest across the world after China. MSMEs might be considered as small investment enterprises but their contribution to the Indian economy has always been noteworthy. Our homegrown enterprises have been hit hard by the pandemic and this move by the government lays a path for liquidity infusion, thereby giving them the necessary handholding. Many of our startups are facing a crisis with the liabilities and are waiting to resume activity and engage their workforce, at least for the next quarter. The NBFCs will get a push due to special liquidity schemes and partial credit guarantee schemes announced by the government” stated Roma Priya, Founder of Burgeon Law (India’s leading boutique law firm catering to startup investment ecosystem). 

Meghna Suryakumar, Founder and CEO, Crediwatch (A credit intelligence firm provides data insights to lenders and corporates for business entities) said, “In our view, some of the measures which should be welcomed by small businesses in India are – 

1. Global tenders barred from procurements up to Rs 200 crores - the Government's e-procurement sites have typically been flooded by large foreign players who bring unfair advantage in terms of pricing and size. MSMEs working as ancillary units (e.g. autos, infrastructure) lose the bidding on smaller deals. The move should improve the competitiveness of Indian MSMEs on government contracts. It should also see an increase in registration by MSMEs and Mid-Market businesses on such platforms. 

2. New definition for MSMEs - This has been a long pending demand from multiple industry associations. While MSMEs have tried to remain within a particular size in order to benefit from the MSME tag in the past, the new definition will promote them into growing further in size and scale. 

3. Collateral-free automatic loans - While this extends the previous loan moratorium benefits, the new terms should benefit as many as 45 lac businesses and help with working capital requirements in coming days. We believe, setting the threshold for eligibility (Rs 25 cr outstanding and Rs 100 cr turnover) is helpful but it is yet to be seen whether public sector banks will underwrite such unsecured loans at a faster pace on the back of these terms. The real-need of the hour is to move to cash-flow based lending. 

4. Equity & Subordinate Debt infusion - The need for Long term capital will increase three months from now as businesses grapple with uncertain demand and high fixed costs. In our view, the Rs 70,000 crore facility should assist stressed MSMEs in raising funds as the tide turns. 

Meghna further added, “While a technology-driven approach may pave a way to lower recurring costs in the future, the FM's announcements today should ease the stress of a large number of promoters, partnership firms and small private limited entities. Coupled with lower TDS and TCS rates, the cash-in-hand should be prudently used by these MSMEs in the months to come.” 

Anuj Aggarwal, Co-Founder and CFO, 247around (An after sale service startup) commented, “I believe the steps are taken in the right direction. Today's announcements are going to help a lot of companies. Positives for us are the reduction in EPF rates for one quarter, TDS rate reduction and pending IT refunds. These all would help in creating additional liquidity in the near term. Since MSMEs which don't have existing loans or are not stressed/NPAs fail to qualify for the emergency credit line, I believe many small enterprises would not be able to solve their current issues like paying salaries, making vendor payments and buying material etc. And this would be a disappointment for those. We are still checking the finer details and discussing it with experts. More direct and immediate benefits could help MSMEs to kickstart business. Like support in employee wages, income tax benefits, instant loans basis GST profile without any conditions, etc.” 

Sandip Chhettri, COO, TradeIndia.com (India’s largest online B2B marketplace) said, “The economic package details shared by the finance minister clearly shows the focus is extensively on the MSMEs who have been worst hit due to COVID-19 pandemic. It also shows the government's intent to not only support small businesses during these unprecedented times, but also to provide them with an opportunity to avail these benefits to sustain and grow. Among them what comes first is Rs 3 lakh crore collateral-free automatic loans for businesses to meet operational liabilities, buy raw material and restart business. Without an iota of doubt, this is going to be a great relief for the lockdown-hit MSMEs in every nook and corner country. The 3 lakh crore collateral free loans with a 12-month moratorium will provide the much-needed boost to the already struggling MSMEs and will fulfil the government's mission to be 'vocal for local'. This will encourage manufacturing and will lessen our reliance on imports.” 

“Then, in order to rescue the stressed MSMEs, the Finance Minister announced a package of Rs 20,000 crore of subordinated debt benefit. In other words, while the first measure is of general kind, this one is aimed specifically at stressed MSMEs to push their liquidity. On the other hand, in order to help potential and viable MSMEs to expand their capacity, another Fund of Funds amounting to Rs 10,000 crore has been announced. Thus, the support measures addresses all major issues related MSME credit in a comprehensive manner” further added Sandip. 

Vikas Chaturvedi, CEO, Xanadu Realty said, “We at Xanadu believe housing demand resurgence is the way to revive the economy. We hope and request soon our government will announce impactful measures to increase demand- be it through interest rate reductions, waiver of registration duty, tax incentives, subvention, and reduction of GST.” 

Amith Agarwal, Co-Founder & CEO, AgriBazaar commented, "The series of financial impetus by the Hon’ble Finance Minister to various economic sectors is most welcoming. The government has rightfully identified the agricultural sector as one of most impacted and the 2 lakh Cr loan to the Indian farmers is a big relief to the sector. As India moves towards a new economic revival with the spirit of self-reliance infused by Hon’ble PM, the agricultural sector has to be rapidly modernised and digitalised to have a supply chain continuity going on the face of any future crisis. We are committed towards these goals in connecting various stakeholders and look forward to further announcements from the government tomorrow"