All India Organisation In Service Of Small Scale Industries has made a representation to Ministry of MSME and bring to their notice the effect of COVIND19 on the activity of the MSME sector & overall Trade and request for Support for MSME.


Ref. No.LUB/19-20/437

Dated:- 20/03/2020

Shri Ram Mohan Mishra
Special Secretary and DC, MSME,
Ministry of MSME, Govt. of India,
New Delhi –110011

Sub:- Impact of Coronavirus on MSME Sector-regarding.

Dear Sir,

Greetings from Laghu Udyog Bharati.

To begin with we acknowledge & appreciate the preventive steps taken by the Government of India against the “Pandemic Covid 19” in the interest of society & nation. However, it is our duty also to bring to your notice the effect of “COVIND19” on the activity of the MSME sector & overall Trade we wish to submit as under:

The present

1. It is observed that there is substantial reduction in Demand of goods due to closure of Malls, Shops & Hat Bazar & weekly markets in the Urban, semi Urban & rural areas. This has disturbed the micro economic cycle giving impact on the trade & in turn on the The normal credit cycles of receivables and payments is affected as the markets are not functioning, resulting into the acute shortage of working capital by the MSMEs.

2. Many states have put restrictions on the interstate movement of goods & As a result, the compliance of the order supply by the MSMEs to their customers is also halted piling the finished goods. It is also affecting the maintenance of the timely delivery schedules to the PSU & Government organizations which have LATE DELIVERY PENAULTY clause in the contracts.

3. It is also observed that we are heading for the year end of financial year 2019-20. The financial institutes are chasing up the industry & trade to maintain the accounts Due to the disturbed cycle of receivables & credit many MSMMs are under pressure of becoming NPA. It was indeed mentioned by Hon MSME Minister of Government of India in the Parliament during the discussion on the MSME Ministry that “the outstanding of receivables from PSU & Government to MSMEs” is to the tune of Rs.5 5Iakh Crores which indicates the situation itself.

4. Commercial Tax compliances are also due in the ensuing month being the year end & quarter end. Due to the overall situation the compliances are also being delayed as all the MSMEs are not equipped with the WORK FROM HOME facility & depend upon the service providers for such compliances.

Support expected from the Government:

1. We request to extend the ad-hock Additional credit of 25% for working capital by all the financial institutes & PS Banks until the situation of COVID 19 is normalized.

2. It will be very much supportive to the MSMEs by extending the “NIL INTEREST” on all loan & cash credit limits until the end of the situation.

3. The date of payment of Government Taxes shall be extended until the situation is normalized for all MSMEs. The time limit for the submission of all the Government returns to be extended also.

4. Government Departments as well as companies may be directed for immediate release of pending receivables to MSMEs which will be helpful in meeting their Working Capital

5. The delivery schedules of orders in process to be extended until the situation is normalized & LD penalties to be kept aside for the same period.

6. All such pending orders should be kept alive & continued without cancellation.

We also wish to bring to your attention that “in case the pandemic situation turns into stage III & demand for the complete closure of the activities at all levels for certain period then such time period shall be treated at par with the provision of “LAY OFF NORMS” across the country which will confirm the healthy relationship between employee & employers with the touch of “Pariwar attitude”

We confirm herewith that Laghu Udyog Bharati will support all the decision made by the Government of India to fight with COVID 19 & completely overcome it in the ensuing weeks to come.

With warm regards

Yours Sincerely,
Baldevbhai Prajapati
All India President,
[M] 0-98241-55666
Email:- [email protected]

CC- Shri Anand Sherkhane

Addl. Development Commissioner, MSME,
Ministry of MSME, Govt. of India,
New Delhi –110011

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