Mr. Sharad Kumar Saraf, President of Federation of Indian Export Organisations (FIEO), has praised a series of measures taken by the Reserve Bank of India. These, include measures to maintain adequate liquidity in the system through TLTRO 2.0; lowering of Liquidity Coverage Ratio; incentivizing the bank lending by cutting reverse repo rate to 3.75%; and facilitating normal functioning of markets. Additionally, the measures will have a substantial positive impact on the financial system and the economy in these times of COVID-19 crisis.
He added that refinancing of Rs 15,000 Cr to SIDBI and 90 days NPA norms to exclude moratorium or deferment period will give relief, particularly to MSME units. It is important since these units are struggling to keep themselves alive. Notably, they have no business and are saddled with fixed costs. However, Mr. Saraf also cautioned the Government to immediately announce a comprehensive economic package for the industry. Explicitly, this package should provide them relief in payment of wages, statutory obligations, rental and utilities.
The FIEO President was of the view that exporters’ interest should be paramount in the package. This is so because they are the worst sufferers facing challenges; both at the domestic turf and in the global market. He suggested extension of pre and post-shipment credit tenure, interest equalization scheme, interest-free loan to cover forward losses. Adding to the list, automatic enhancement of limit by 25% without further condition/collaterals, enhancement in MEIS rate by 2% for all sectors and 4% for employment-intensive sectors. Mr. Saraf went onto advise amnesty for the default under Advance/EPCG authorization/EOU, among other measures.