FM’s package of no use to micro enterprises: ex-CM

‘A fresh Budget must be presented in Parliament's next session’

Former Maharashtra chief minister and senior Congress leader Prithviraj Chavan on Monday said the package announced by the Union government is of no help to micro, small and medium enterprises (MSMEs), especially micro enterprises. Mr Chavan said a fresh Union budget needs to be presented in the next session of Parliament, considering the impact of successive lockdowns on the economy.

Over 6 cr. MSMEs

“India has 6.34 crore MSMEs, out of which 6.3 crore are micro enterprises. Out of 11.09 crore workers in MSMEs, around 10.76 crore are employed in micro businesses,” Mr. Chavan said, addressing the press.

As per the Union Finance Minister’s announcement, enterprises with a turnover of around ₹100 crore, and borrower accounts with outstanding credit of up to ₹25 crore on February 29, 2020, will get a loan up to 20% of the outstanding amount. “Which micro enterprise has a turnover of ₹100 crore? The announcement essentially means that these 6.3 crore micro enterprises and 10.76 crore workers are automatically negated from the package,” he said.

He said Prime Minister Narendra Modi’s announcement of a ₹20 lakh-crore package and subsequent explanations from Union Finance Minister Nirmala Sitharaman turned out to be ‘hollow.’ “Nobody trusts this government’s economic policies anymore. How is it going to raise money for developmental works? How much is it going to spend on health services? Are salary cuts planned? All these questions need to be answered,” he said. A new budget has to be presented considering the financial position once Parliament meets in June, a loan will have to be availed of, and currency printing has to be pushed, Mr. Chavan said. “But no bold measures are seen in this package.”

The ₹20 lakh cr. mystery

Mr. Chavan referred to Goldman Sachs’ recent prediction that the Indian economy may drop to (-)5% in financial year 2020-21. “The government has to come up with new economic equations,” he said.

Hitting out at the ₹20 lakh-crore figure, Mr. Chavan said that despite the announcements, it is yet not clear how much money is going to be given.

“Forget us, 12 global financial institutions have also not been able to give us the exact number. On an average, from their numbers, the actual amount is barely 1% of the GDP,” he said.