Apr 9: The government is planning relief measures to help micro, small, and medium enterprises (MSMEs) facing financial stress due to the West Asia conflict.
Authorities may ask the Reserve Bank of India to extend timelines for classifying loans as Non-Performing Assets (NPAs) and Special Mention Accounts (SMAs). This would give businesses more time before their loans are marked as stressed or bad.
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During the COVID-19 pandemic, a similar step was taken, extending the NPA period from 90 days to 180 days. The government is considering doing something similar now to support MSMEs.
MSMEs are an important part of India’s economy, contributing about 30% to the GDP, 35% of manufacturing output, and nearly 45% of merchandise exports. Many MSME borrowers have approached banks seeking relief, and officials say timely action is needed to prevent short-term problems from becoming long-term challenges.
The plan is part of a larger ₹2.5 trillion relief package, including credit guarantees, to help MSMEs stay strong during global uncertainties.
