Who is the lender: Chidambaram on MSME loan

New Delhi: The Congress on Friday took a sarcastic dig at union ministers after different statements were issued on the MSME sector by Finanace Minister Nirmala Sitharman and her Road Transport colleague Nitin Gadkari.

P. Chidbambaram said: "Minister Nitin Gadkari says that governments and PSUs owe Rs 5 lakh crore as unpaid dues to MSMEs and Minister Sitharaman says she will offer collateral free loan of Rs 3 lakh crore to MSMEs (numbering 45 lakhs)."

He questioned "So, who is the lender and who is the borrower?"

Slamming both, the former Finance Minister said: "Will the two ministers 'settle their accounts' first and let MSMEs save themselves without government's 'help'?"

Sitharaman on Wednesday announced collateral free automatic loans for businesses, including MSMEs of up to Rs 3 lakh crore.

Under the measure, borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover would be eligible for the special collateral free loan. The loan will have a 4 year tenor with moratorium of 12 months on principal repayment and the interest will be capped. There will be a 100 per cent credit guarantee cover to banks and NBFCs on principal and interest. The initiative can be availed till October 31, 2020, and no guarantee fee and fresh collateral would be required.

On the back of the scheme, 45 lakh units can resume business activity and safeguard jobs. The move is part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday evening.