Industry needs large-scale investments to escape from the cage of the corona.

  • by Amandeep Saluja
  • July 22, 2020

The COVID-19 has led to the transformation in the business sector on how do they operate pressurizing them to re-evaluate their future course of action. The pandemic happened at a time when already the global economy was showing symptoms of a slowdown. This has created stress in the industry. To recover from this the industry needs support from the government as well as private players in terms of investment.

The real challenge facing the industry right now is acquiring greenfield investments which can be either domestic or international. Theoretically speaking self-sustaining industries can be the part of the solution but some concerns should not be neglected. On the contrary, getting overseas big players is a different area as it involves different factors like global politics, competitive bidding, etc.

Regarding Investment what should be kept in mind is that the investment choices should not in favor of few which would be both politically incorrect as well as prone to objection making the overall process bitter. To begin with, it becomes necessary to identify the prime concerned or self competent industries. Recognizing the above industries value chains and looking for strategic medium-sized investments for them becomes necessary.

The Manufacturing and services sector is one of the pillars of the Indian economy. Micro, small and medium enterprises (MSMEs) constitutes an important part of this sector. Under Prime Minister, Atmanirbhar Bharat Abhiyan relief and benefits would be given to MSEMs. Fund of INR 10,000 crore will be set up to provide equity funding support for MSMEs. Moreover, for 2 lakh MSMEs Rs 20,000 crore of subordinated debt will be facilitated. And also there will be collateral-free term loans for businesses at concessional rates of Rs 3 lakh crore emergency working capital.

Till July 15 only 22% of the 3 crore loan has been shell out which is problematic. Without the loan terms being remodeled the remaining amount will remain stagnant. The process preventing the acceptability for guaranteed credit to 20% of the loan until February must be canceled.

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Amandeep Saluja

Amandeep is a Co-founder & Business Development Executive at TSD Networks. Contact at 'amandeep@tsdnetwork.com'
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