Good news for small and medium businesses firms as India is considering offering easier loan repayment terms and tax breaks for small and medium-sized companies to help Asia’s third-largest economy weather the onslaught of the coronavirus.
The Finance Ministry is considering extending loan tenors and relaxing bad-debt norms for small firms.
The country like India, which is under pressure to shield the $2.7 trillion economies from the impact of the virus outbreak at a time when the expansion is already poised for its weakest pace in more than a decade. Countries, including the U.S., China and Indonesia, have announced plans to spend billions of dollars to stem a slide in growth.
As per the government data, there are employee more than a million in number, who are account for 45% of factory output and over 40% of the nation’s exports in so-called micro-, small- and medium-sized businesses.
Local equities resumed a slide Thursday and the rupee weakened to a new low as risk assets continue to be routed amid an increase in the number of coronavirus cases domestically. India has reported 169 infections, while cases hit 211,713 worldwide and deaths exceed 8,700.
“The large scale shutdowns and travel bans mean that stress is inevitable in both the informal and formal sectors,” said Teresa John, an economist at Nirmal Bang Equities Pvt. in Mumbai. “We expect the RBI and the Ministry of Finance to provide support by way of deferred payments and interest dispensation.”
Consistent effort by the authorities around the world are acting to pre-empt a crisis, where the prime motto is to focus on keeping households, small businesses and industries afloat rather than let their economies slip into a recession.
U.S. President Donald Trump promised cash payments of $1,000 or more to Americans as part of a $1.2 trillion stimulus plan. Australia will also provide handouts, and Japan may too. Having already dropped her loyalty to a balanced budget, German Chancellor Angela Merkel even said she was willing to discuss pooling the euro-area’s borrowing capacity.
