Finance Minister Nirmala Sitharaman on Friday said the government is monitoring progress of various relief measures, especially the transmission of repo rate cuts to corporates and consumers to stimulate the economy, hit by COVID-19 crisis.
While interacting with the Managing Committee Members of PHD Chamber of Commerce and Industry through video conferencing, she said the government has always recognised the importance of wealth creators as they generate employment opportunities and utilise resources in optimal manner for promoting the socio-economic development in the country.
Sitharaman acknowledged that the Prime Minister has always facilitated a helping hand and recognised importance of MSMEs, an official statement from the ministry said.
"We are closely monitoring the situation in consultation with banks so that relief measures announced by the Government are effectively percolated at ground levels especially the transmission of repo rate cuts to consumers in terms of reduced interest rates," the release quoted her.
Last month, the RBI slashed the benchmark repurchase (repo) rate, the price at which banks borrow from the central bank, by 40 basis points to a historic low of 4 per cent.
RBI Governor Shaktikanta Das had said monetary policy transmission to banks’ lending rates has continued to improve.
"The 1 year median marginal cost of funds-based lending rate (MCLR) declined by 90 bps (February 2019-May 15, 2020). The weighted average lending rate (WALR) on fresh rupee loans has cumulatively declined by 114 bps (basis points) since February 2019, of which 43 bps decline occurred in March 2020 alone," he had said.
The Finance Minister said that they are closely watching the developments in disbursement of loans under the provision of Rs 3 lakh crore collateral free automatic loans for businesses to mitigate the daunting impact of COVID-19 on trade and industry.
The government has always focused on minimum government and maximum governance with a special focus on addressing challenges faced by industry and promote ease of doing business, she said.
The government has always provided a helping hand without differentiation to all industry stakeholders especially to MSMEs.
PHD Chamber of Commerce and Industry termed Rs 20.97 lakh crore stimulus package comprehensive and substantial.
The package is not only the monetary and financial stimulus, but also contains the game changing reforms to take India to the next high, it said.
The chamber suggested that one-time restructuring of the loans without affecting the classification for the severely impacted sectors such as tourism, aviation, entertainment, real estate, and automobile, among others is the need of the hour.
There may be a formal communication from the government to the banking sector to remove the fears from the minds of bankers so that the bank officials are able to sanction and disburse loans to the trade and industry without any fear, the chamber suggested.
It also said that there may not be any criminal proceedings if some business entity turns into NPA because of some genuine reason.
Besides the Finance Minister, Revenue Secretary Ajay Bhushan Pandey, Financial Services Secretary Debasish Panda, Corporate Affairs Secretary Rajesh Verma and Chief Economic Adviser Krishnamurthy Subramanian were present.