The Union Minister of Finance and Corporate Affairs Nirmala Sitharaman today said that the government is working with RBI on the Industry’s need for the restructuring of loans due to the COVID-19 impact. While addressing the National Executive Committee Meeting (NECM) of the Federation of Indian Chambers of Commerce and Industry (FICCI), Sitharaman said, “The focus is on restructuring. Finance ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required, is well taken.”
Elaborating on the extensive consultations on the reform measures that are being announced by the government, Sitharaman said, “Every step which is being announced and taken, is taken after exhaustive consultations with the stakeholders and within the government to make sure that no step is going to be a failure because we did not make necessary collateral changes. We have taken these steps to ensure that the impact is felt on the ground.”
Addressing the concerns raised by the FICCI members on the difficulties faced by the MSMEs in taking loans under the Emergency Credit Guarantee Scheme announced by the government, Sitharaman said that, “Banks cannot refuse credit to MSMEs covered under emergency credit facility. If refused, such instances must be reported. I will look into it.”
On the FICCI suggestion for creation of a Development Finance Institution to handle the emerging credit requirements of the industry, the Finance Minister said, “The work is going on the Development Finance Institution. What shape it will take, we will know shortly.”
Stressing on the need for reciprocity in trade deals, Sitharaman said, “Reciprocal arrangements are being asked with the countries with which we have opened up our markets. Reciprocity is a very critical point in our trade negotiations.”
The Finance minister said that the decision on reducing GST rates on the healthcare and other products will be taken by the GST Council.
Sitharaman said the Finance Ministry is working with RBI on the demand of the hospitality sector for extension of moratorium, or restructuring. “I fully understand the requirements of the hospitality sector on extension of the moratorium, or restructuring. We are working with RBI on this,” She said.
FICCI President Dr Sangita Reddy appreciated the government’s proactive approach in dealing with the situation. “While the green shoots of recovery are being seen, sustaining this improvement in the operational parameters of businesses will require continuous support from the government. The support is particularly needed in the realm of strengthening market demand and to boost demand,” said Dr Reddy.
FICCI Senior Vice President Mr Uday Shankar delivered the vote of thanks and said that the chamber would work with the government in mitigating the challenges faced by the industry.