On 2nd April 2020, FAIITA submitted a letter to the requesting support to industry in the following terms:
” Namaskar from FAIITA. Federation of IT Associations of India (FAIITA) applauds the efforts made by Govt of India towards fighting the Coronavirus menace. Present problem has shaken the country both in social terms and financial terms. Once the lockdown is lifted after the successful fight with the virus the herculean task of rebuilding the economic structure is to be started. Govt has made certain initiatives which will help the business and industry to a limited extent but major issues such as erosion of capital because of the fixed expenses will result in huge loss of revenue to the government, shortage of working capital and eligibility of generation of working capital loans. We, therefore, suggest the following measures to be taken care for MSME and trade channel:
1. Each MICRO UNIT AND TRADE be on-demand sanctioned a term loan equal to 1% of the total turnover of the company towards working capital expenses such as interest, salaries, rents, electricity etc for 3 months and such expenses be paid from the said term loan repayable in 36 months at a fixed interest rate of 7%.
2. These expenses to be allowed to be capitalized during the current financial year and repayment of term loan be allowed as an expense linked with the repayment period of term loan.
3. Each Micro Unit should be allowed to get a reimbursement of 5% of the GST paid every month for one year towards meeting with the forthcoming expenses.
These two simple measures will solve the entire problem of growth, employment of banking funds, revenue collections and capital adequacy. We are prepared to explain the impact of these proposals to finance ministry or any other person appointed for the purpose.
With kind regards, Kaushik Pandya, President FAIITA.”
In the meanwhile, the Government of India, Ministry of Finance, Department of Revenue, has released the following press note on April 8, 2020:
“In the context of COVID-19 situation and with a view to provide further relief to the business entities and individuals. It has been decided to issue all the pending income-tax refunds up to Rs 5 lakhs immediately. This would benefit around 14 lakh tax payers. It has also been decided to issue all the pending GST and custom refunds which would provide refund to around 1 lakh business entities including MSME. Thus the total refund granted would be approximately Rs 18,000 crores.”
These measures may not be sufficient for the industry to tide over the crisis, but they can definitely give a ray of hope.
Let us hope the best and prepare for the worst.