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Business Economy

Praveen Sinha of PinCap welcomes 20 Lakh Cr stimulus package fund, hopes for complementary packages

Praveen Sinha of PinCap welcomes 20 Lakh Cr stimulus package fund, hopes for complementary packages

New Delhi, May 23, 2020 (PR News): Amidst the most difficult times of the twenty-first century, India is fighting a war on two fronts — Coronavirus and the resulting adverse economic impact. In his address to the nation on May 12th, PM Modi announced a 20 lakh crore stimulus package for the revival of the Indian economy. While speaking on the development, MD of Gurugram-based NBFC PinCap, Praveen Sinha calls the allocation of the mammoth package as the one that can be the starting point in rescuing the economy from the unprecedented meltdown.

“The stimulus package has many good incentives that will increase the liquidity in the hands of business and individuals and hence helping in demand side of the market,” says Sinha. “25% rate cuts in TDS, TCS and reduction in PF payments from 12% to 10% for three months are all in that direction,” he added. PM Modi’s announcement of the stimulus package under Atma-nirbhar Bharat Abhiyan (Self-Reliant India Scheme) has been praised by different stakeholders across the spectrum.

Following the announcement, Finance Minister Nirmala Sitharaman held a series of press conferences to release details about the package. Interestingly, micro, small and medium enterprises (MSMEs) have attracted great attention and a considerable chunk of the package. Commenting on the break-up of the package, Praveen Sinha says, “The scheme also includes a INR three lakh crore collateral free loan scheme for businesses, especially MSMEs. This will give a breathing space to the fund-starved MSMEs.”

He further highlighted, “If the demand side does not pick up then it will add to the already growing NPAs of NBFCs and Banks,” and suggested that, “the government needs to think of many more ideas to compliment the aid else it will result in deferred crisis.” When the Central government imposed phase-1 of the lockdown, Praveen feared that it could hit the MSME sector hard, as they already face cash crunch in the normal situations as well. He was one of the first Indian entrepreneurs to demand for a stimulus package for the MSMEs in the situation if the lockdown gets extended.

Apart from MSMEs, NBFCs have also gained considerable attention from the government. Being the managing director of an NBFC — PinCap, Praveen Sinha is satisfied with the stimulus that NBFCs got from the government. He says, “NBFCs have also been given good attention in the package”. However, he is also sceptical about the rapid execution of the policies on the ground level. “We still find banks reluctant in providing actively under these schemes,” he added.

While praising the swift actions of the government to bring traction to the economy, Sinha stated that the package will require multiple complementary packages to bring concrete changes. Moreover, several prominent economists from around the world have praised PM Modi’s efforts for setting up new funds to give thrust to the downing economy. Having said that, one of the most suffered industries — tourism and hospitality expressed its dissatisfaction for not getting included in the 20 lakh crore package. It is considered as the sunrise industry and employees millions of people across the nation.

(Disclaimer--Features may vary depending on the regions; subject to change without notice.)

Praveen Sinha is an angel investor, serial entrepreneur and an expert in the NBFC and MSME world. He is also the co-founder of Jabong.

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