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#StartupsVsCovid19: Loan For MSMEs Brings Relief For Businesses On Lockdown Day 50 & More

#StartupsVsCovid19: Loan For MSMEs Brings Relief For Businesses On Lockdown Day 50 & More

The policies and the criteria for the allocation of relief funds to MSMEs was clarified

Sitharaman rolled out collateral-free automatic loans with a target of INR 3 Lakh Cr

The decision is expected to help around 45 Lakh MSMEs resume operations

In what came as a huge relief for MSMEs and small businesses in India, the government’s stimulus package under the Atma Nirbhar Bharat Yojana was finally announced on Wednesday (May 13). Finance minister Nirmala Sitharaman shared the policies and the criteria for the allocation of relief funds for the MSME sector. The allocation is part of the overall INR 20 lakh Cr economic stimulus package announced by Prime Minister Narendra Modi.

Sitharaman rolled out a collateral-free automatic loan for MSMEs which has a corpus of INR 3 Lakh Cr. Tech startups registered as MSMEs can avail the benefits as long as they fit the eligibility criteria. In the last couple of years, many startups have registered themselves as MSMEs to avail the benefits that the government offers to businesses in this class.

Sitharaman also announced that no guarantee or collateral will be taken for providing these loans and will be provided for a period of four years. In another relief, MSMEs will have to pay only the interest amount for the first year while the principal amount will be taken by the government from second year onwards. This means that a moratorium will be provided to MSMEs for the first year. The finance minister said that the decision will help around 45 Lakh MSMEs resume operations. 

Further, the industry is already looking to get back into daily business. IAMAI has suggested that the demarcation under lockdown 4.0 should be based on wards in municipal areas and not whole districts.

IAMAI further suggested that free movement of goods and services should be allowed in and between all wards in municipality zones which are not marked red; shops and establishment should be allowed to open under strict operating guidelines; free movement of people should be allowed under strict guidelines to wear a mask and follow other health and safety procedures to maintain social distance.

Further, the government’s buzzword amid Covid-19, Aarogya Setu, has gained international acknowledgement but that is not really a good thing right now. As per an MIT Technology Review report published on May 7, India’s Aarogya Setu does not stand on par with its global counterparts on several aspects.

The university ranked 25 individual, significant automated contact tracing efforts globally on five factors — voluntary or mandatory usage, usage for public health purposes only or law enforcement, provision for deleting the data within a reasonable amount of time, data collection and transparency.

Aarogya Setu only cleared two of these criteria. The app’s privacy policy states that only contact information, location and self-assessment data will be collected by National Informatics Centre (NIC), who will also be responsible for deleting the data after a reasonable period of time.

Taking the rising privacy and data collection concerns into account, the Kerala High Court, on May 12, asked the central government to guarantee that the information collected by Aarogya Setu will not be misused. The court has sought a report on the app’s privacy safeguards from the centre.

Talking about technology solutions for Covid-19, NIRAMAI launched an Automated FeverTest for Covid-19 screening that helps identify likely infected people at the entrances of hospitals, workplaces, and public places and helps in controlling the spread. NIRAMAI’s solution is aimed towards enabling automated screening of population by checking not only for fever but also for respiratory abnormalities using its AI-powered Thermalytix solution.

Further, businesses have started to gear up for getting back to offices, but with some behavioural changes of lockdown. After global companies like Facebook, Google, Twitter etc, edtech startup Unacademy has announced that even post the lockdown, 60% of its over 1600 people workforce will be working from home permanently.

Most technology companies, including Amazon and Google as well as startups, have given staff the option to work from home, but only till later this year. Others, like Flipkart and Udaan, have resumed operations with minimal staff.

Gurugram-based edtech startup PlanetSpark has pledged to upskill 1 lakh children of corona warriors at zero fees, in a bid to help them develop career and life-skills during this time. 

The courses on PlanetSpark these K-8 students can sign up for include Communication Skills, Reading & Writing, Mental Maths and Coding. The company said it has already witnessed 3x surge in the number of enrollments since March this year has expanded its team of teachers extensively to cater to the growing demand and to enable a seamless learning experience for students.

Author

Bhumika Khatri

Inc42 Staff

Hailing from a business-oriented family, Bhumika has always been crunching numbers in her head. Words are her escape and she looks to find hidden startup stories. Reach her on [email protected]

https://inc42.com/buzz/govt-slashes-pf-contribution-for-startups-employees-boost-for-short-term-liquidity/
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