Government should extend period of loan repayment under ECLGS for MSMEs: Parliament panel

A Parliamentary panel on Monday suggested that the government should extend the period of repayment of loans under the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.

The Parliamentary standing committee on industry has also asked the government to digitise the GST system to ensure paperless refund of claims.

It noted that under ECLGS, the repayment period of 3-4 years, including the moratorium period, is a "very short" period for MSMEs, which are struggling to survive after the second COVID wave.

"The committee, therefore, recommends that the repayment period should be extended up to 7-8 years with at least two years of moratorium on the principal amount.

"With respect to the interest, moratorium for interest from March 1, 2020 onwards should be announced by the RBI," it said.

Noting that a number of MSME-oriented products presently being imported can be manufactured in India, the panel suggested that a Central Market Intelligence Centre be set up for import-related products and components in the country.

Further, the committee said the Centre may be entrusted with the task of putting out a list of products which are being imported along with their specifications. It should also spread awareness of the same through electronic, print and social media to attract interested entrepreneurs to set up new manufacturing enterprises in the MSME sector.

The committee also expressed "deep concern" over under-utilisation of funds by the Khadi and Village Industries Commission (KVIC) for their flagship schemes, thereby hampering the promotion and development of Khadi and Village Industries and employment generation in rural areas.

The KVIC, it suggested, should endeavour to popularise Khadi in new unexplored global markets and also try to secure trademarks in those countries in respect of its various products to safeguard the interests of its consumers and Khadi artisans who are manufacturing genuine Khadi products through their hard work and continuous efforts.