The government is working with Reserve Bank of India (RBI) on the industry’s need for restructuring of loans to absorb the adverse impact of COVID-19 pandemic, Finance Minister Nirmala Sitharaman said on Friday.
“The focus is on restructuring. The Finance Ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required is well taken,” she said while addressing the national executive committee meeting of Federation of Indian Chambers of Commerce and Industry (FICCI).
Sitharaman said every step being announced is taken after exhaustive consultations with the stakeholders and within the government “to make sure that no step is going to be a failure because we did not make necessary collateral changes. We have taken these steps to ensure that the impact is felt on the ground.”
Addressing the concerns raised by FICCI members on the difficulties faced by MSMEs in taking loans under the Emergency Credit Guarantee Scheme announced by the government, Sitharaman said banks cannot refuse credit to MSMEs covered under emergency credit facility.
“If refused, such instances must be reported. I will look into it.” She said work is going on the development finance institution. “What shape it will take, we will know shortly.”
Stressing on the need for reciprocity in trade deals, Sitharaman said: “Reciprocal arrangements are being asked with the countries, with which we have opened up our markets. Reciprocity is a very critical point in our trade negotiations.”
The Finance Minister said the decision of reducing GST rates on healthcare and other products will be taken by the GST Council.
Sitharaman said the Finance Ministry is working with RBI on the demand of the hospitality sector for extension of moratorium or restructuring. “I fully understand the requirements of the hospitality sector on the extension of the moratorium, or restructuring. We are working with RBI on this.”
FICCI President Sangita Reddy appreciated the government’s proactive approach in dealing with the situation.
“While the green shoots of recovery are being seen, sustaining this improvement in operational parameters of businesses will require continuous support from the government. The support is particularly needed in the realm of strengthening market demand and to boost demand, she said.