The Centre is exploring the possibility of allowing industry to use the Employees’ State Insurance (ESI) scheme funds for payment of wages.
In a special e-session organised by the Bharat Chamber of Commerce on Thursday, Nitin Gadkari, Minister of Road Transport and Highways and MSME, said the matter is being considered at the “highest level”.
It may be noted that a host of industries, including those in the MSME sector, and a few States have urged the Centre to allow the use of funds collected under the ESI scheme for payment of wages, or atleast part of the wages amid the lockdown.
“ A decision in this regard will be taken at the Prime Minister and Finance Ministry level,” Gadkari said replying to a query raised by a member of the chamber.
The pandemic and the resultant lockdown has made things difficult for employers, particularly in the MSME sector, to ensure payment of wages to all their employees given that the establishments are shut, affecting their revenue generation.
The ESI is a self-financing social security and health insurance scheme which provides comprehensive social security benefits such as reasonable medical care and a range of cash benefits in times of need such as injury, sickness and death.
Packages for MSMEs
According to Gadkari, the government is also working “minutely” on various packages to help the MSME sector tide over the present crisis.
“We are constantly monitoring the problems of MSMEs and moving towards coming up with policies. We are trying to support the industry because without MSMEs we cannot create employment potential and without employment we cannot remove poverty,” he said.
The MSMEs have large amount of payment dues from the Central and State government agencies, and the government is working on a scheme to clear the dues to improve liquidity.
“We are working on a scheme estimated at around ₹1 lakh crore wherein the government will act as a guarantor and all pending payments of the MSMEs will be borne partially by the government and PSUs. It will give a good relief to MSMEs,” he said.
Opportunities in the crisis
The current crisis could also turn out to be “a blessing in disguise” for India as it could enable us to attract fresh investments and step up exports.
MSMEs, which contribute close to 29 per cent to the economy’s growth and 48 per cent of exports, could particularly benefit from US and Japan’s move to lower their imports (sourcing their products) from China in the post-Covid-19 scenario.
“We need to increase our productivity, reduce costs by bringing down logistics and power costs, look to scale down our imports and step up exports,” he said.