Stimulus package: Govt's liquidity boosting steps to safeguard businesses, jobs, say retailers

New Delhi: Retailers on Wednesday said measures announced by Finance Minister Nirmala Sitharaman will bring back liquidity with businesses and provide a boost to the economy.

For retailers steps such as a reduction in TDS rates for payments will help in keeping liquidity back with businesses, the Retailers Association of India (RAI) said in a statement.

It, however, said as retail is not covered under MSME, the sector will not benefit from the several measures announced to help such units.

Representational image. Reuters

Related Articles

From BPSC to AIIMS, government jobs you can apply for this week

How ‘Today At Apple’ became a sleeper hit that’s drawing people to Apple Retail stores in Saket and BKC

"There are some measures that retailers can definitely benefit from such as the reduction in TDS rates for payments — this is a welcome sign as it helps keep liquidity back with businesses," RAI CEO Kumar Rajagopalan said in a statement.

Click here to follow LIVE updates on coronavirus outbreak

He further said, "The other is the 2 percent reduction each in the EPF contribution of both, the employer and employee, which again gives cashback in the hands of people who need it in the immediate term."

Other measures that will play a big role in accelerating the revival of micro, small and medium enterprises (MSMEs) include the statutory relaxation, collateral-free loan support, debt relief and equity infusion, he added.

Click here to follow LIVE news and updates on stock markets

"We also welcome the revised definition of MSMEs as it is more inclusive and encourages MSMEs to grow with confidence while continuing to enjoy MSME benefits," Rajagopalan added.

He, however, said as on date, retail is not covered under the MSME sector.

"Our belief is that a multitude of small brands as well as suppliers to retail will be able to derive big benefits from the measures announced," Rajagopalan said adding retailers would wait for retail to be covered under the MSME.

He said the retail industry is waiting for more reforms from the government over the next few days "so that retailers in India have some working capital in their hands and they are able to retain employment".

Industry leaders across several segments termed the stimulus measures as encouraging and steps in the right directions amid COVID-19 crisis.

They said the incentives announced for the MSMEs and NBFCs are economic booster and will ensure more liquidity thereby, safeguarding the businesses and the jobs of individuals.

Moreover, the government's decision for a reduction in TDS/TCS rate will help provide extra disposable income and a booster shot to get consumption back on track for India Inc.

"Today's tranche of the announcement by the Finance Minister on collateral-free loans, liquidity boosting measures and several beneficial schemes for MSMEs, NBFCs and DISCOMs are steps in right direction amid COVID crisis,” said Welspun Group Chairman BK Goenka.

While, President and CEO Panasonic India Manish Sharma said that the government's decision of declaring an economic relief package amidst these uncertain times is an encouraging step for the industry at-large. ‘

METRO Cash and Carry India MD and CEO Arvind Mediratta said that the government's decision to broaden the definition of MSME to qualify as one is a remarkable move in the path to recovery.

He further said that the reduction of employers and employees PF contribution would help the retail industry.

Kent RO System CMV Mahesh Gupta said the MSME sector has received a series of reforms and support from the government in this very crucial time and has provided a level-playing field by capping the global tenders below Rs 200 crore.

Ajanta-Orpat Group Director Nevil Patel said the moves announced by the government today under package would help in the creation of more job opportunities.

Deloitte India Partner and Leader Consumer Business Anil Talreja said that it would bring the consumption on track.