TEA urges PM Modi to extend moratorium period to help revival

“For the past two months, the industries were not allowed to operate. More importantly, the leading global retail stores would reopen only from June and place orders gradually. Without having any activities, the MSME’s could not repay the interest and in this background, we strongly feel that the revival would happen only after another six months,” said Raja M Shanmugam, president of TEA, in a statement.

In view of this, TEA has urged the Centre to extend the moratorium on servicing of interest and principal by another nine months for MSMEs. Similarly for non-MSME units, which are just above the MSME category, but not in the league of big corporate, the extension of moratorium on servicing of interest and principal should be for at least three to six months. Non-MSMEs, too, are facing a liquidity crisis.

These high leverage but functional units are severely impacted, requiring to restructure their debt portfolio in this unprecedented situation. “In order to enable those units to come out of the crisis, a one-time‘ restructuring of debt’ option should be made available to all those who are in need. This restructuring should not result in asset downgrade, resulting in units classified as NPA and rather this should be announced as ‘hand-holding’ opportunity to the otherwise performing units, but that are stressed due to COVID-19 situation,” he added.