Sunday, June 13

TN CM Writes to Counterparts in 12 States to Urge Centre on Loan Moratorium

Tamil Nadu Chief Minister M K Stalin on Tuesday wrote to his counterparts in 12 states, urging them to prevail upon the Centre to offer moratorium on repayment of loans to Micro, Small and Medium Enterprises in the wake of the lockdowns due to the second COVID-19 wave. The states should show collective strength on this matter and the Reserve Bank of India should also be persuaded to give moratorium, he said.

Expressing happiness that “all our collective efforts”, urging the Centre to purchase vaccines and provide them free of cost to all states have been “instrumental” in convincing the union government and Prime Minister Narendra Modi to eventually reverse the vaccine policy, Stalin said the states should come together again. “In this context, I believe all the state governments should again come together on the pressing issue of asymmetry in treatment of borrowers, particularly MSME units and small borrowers, during the first and second waves of COVID-19,” he said.

Stalin wrote to his counterparts in Andhra Pradesh, Bihar, Chhattisgarh, Delhi, Jharkhand, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Telangana and West Bengal, seeking their support on this issue. The TN CM said that in April-May 2020 when the Centre announced the nationwide lockdown, a moratorium was allowed on repayment of loans for such borrowers.

However, in April-June this year, when lockdowns are being imposed, based on local conditions by the respective states, similar relief to borrowers is not provided. Stalin said he took up this issue with the Centre and requested moratorium on repayment of loans.

“I request all the states to write to both the Union Finance Minister and the Governor, Reserve Bank of India, to prevail on them to offer moratorium on repayment of loans for at least the first two quarters of 2021-2022 to all small borrowers with outstanding up to Rs five crore in view of the lockdowns induced by the second wave of COVID-19.” The absence of such relief measures would force many businesses to close and lead to widespread economic distress. “These MSMEs and small businesses are the mainstay of our economy and employment generation,” he said.

Stalin said he was confident that his counterparts would appreciate the demand and proactively take it up with the Centre at the appropriate level. “We need to show our collective strength at this hour of great need,” he said.

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