Jubilee Post News & Views
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Business that are reeling under pressure since the COVID-19 pandemic hit the country can have some hope with the world bank decision to help them.
The loss of skill labour and also slump in demand even after the lockdown opened kept the sector thinking about reforms and way to the recovery. The world bank decision the industry experts hope will bring back the sector on track. The MSME funding is under the multilateral lender’s Development Policy Loan, which is a direct budget support.
The World Bank has said it will provide USD 750 million budget support to 15 crore MSMEs in the country. This with an aim to increase liquidity access for viable small businesses impacted by COVID-19.
Lauding the government’s Rs 3.7 lakh crore MSME support package under ‘Atmanirbhar Bharat’, World Bank Country Director in India Junaid Ahmad said the RBI also has used different instruments to infuse liquidity in the market either through banks or SIDBI.
The USD 750 million support is in addition to the USD 2 billion funding that the World Bank has already announced for the social and health sector. This takes the total lending to India due to COVID-19 to USD 2.75 billion within three months.
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MSMEs sector was hit by the pandemic particularly after the country went in to lockdown and workers were forced to shift their base to their native places owing to now work at the cities they lived.
We give direct budget support when the government puts together policy framework that we believe deserves support, said Ahmad. He further said the government steps would help unlock liquidity for MSMEs, strengthen NBFCs and small finance banks and enable inclusive access to financing.
“World Bank’s Board of Executive Directors has approved a USD 750 million MSME Emergency Response program to support increased flow of finance into the hands of micro, small, and medium enterprises (MSMEs), severely impacted by the COVID-19 crisis,” the World Bank said in a statement.
Earlier, the lender had approved a funding of USD 1 billion each for the social and health sector for support during the pandemic.
