PM Modi wants bailout package first for MSMEs, poor and the vulnerable

New Delhi, May 01: The government is working on a rescue package to address the needs of the MSME segment.

The focus would be on the MSMEs first rather than the corporate sector, government sources have told OneIndia. There have been several meetings headed by Prime Minister, Narendra Modi to discuss the issue and the consensus is that the package should first be released for the MSMEs rather than the corporate sector first.

While most ministries are urging for a larger package, the PM is of the view that the focus must first be on the MSME, financial sector, health care and the poor. The MSMEs have taken a big hit owing to the coronavirus lockdown. They have not benefited much from the first package announced by Finance Minister, Nirmala Sitharaman and also the announcements made by the RBI.

The government could provide a direct guarantee against fresh loans to the MSMEs. This would ensure that they can raise funds from banks to stay solvent. It may be recalled that MSME minister, Nitin Gadkari had hinted that there was a possibility of setting up a Rs 1 lakh crore revolving fund for the MSMEs.

On the corporate sector, discussions would be held after the lockdown ends. It may be recalled that the corporate sector got benefits from the corporate tax cut in September 2019. The rates for domestic companies were reduced to 22 per cent from the earlier rate of 30 per cent.