Parliament Panel Calls Government's Stimulus Package "Inadequate"

A high level Parliamentary panel has said that as the second wave of the Coronavirus pandemic "even more vigorously ripped the economy, particularly the micro small and medium (MSME) sector", the Centre's stimulus package for economic revival has proved to be "inadequate".

The Parliamentary Standing Committee on Industry of Rajya Sabha, in its report on the impact of the pandemic on the MSME sector, said in its observation on Government's efforts to counter its ill effects, "the stimulus package announced by the Government for the economic revival from the pandemic hit economy has been found to be inadequate as the measures adopted were more of loan offering and long-term measures instead of improving the cash flow to generate demand as immediate relief."

In this light, the panel has recommended that "the Government should immediately come out with a larger economic package aimed at bolstering demand, investment, exports and employment generation to help the economy, including MSMEs to recover from the pandemic fall-out". 

The committee also noted that a large number of jobs were lost due to Covid-19 pandemic and economic conditions of the households suffered a jolt and their regular income declined significantly during lockdown periods.

It has recommended that "Government should focus on employment generation and ensure that new means of livelihood are generated especially for the youth of the country. A new National Employment Policy may be considered along with exploring the feasibility of establishing a National Electronic Employment Exchange and building a skill-based database to provide employment to skilled manpower in their area of expertise".

Expressing concern on the grim situation of small enterprises due to the Coronavirus pandemic, the panel said that unlike large enterprises, the small units depend on regular cash flows to stay afloat.

It therefore recommended that to ensure their survival, it is imperative for the Government to provide MSMEs with much-needed liquidity support to keep their businesses running and generate job opportunities for the workforce. 

The Government informed the committee that it had not conducted any intensive study to ascertain the actual losses suffered by the MSME sector, and was asked to assess the MSME sector's actual losses and chalk out a strategy to revive the sector.