INDIA ON ITS WAY TO A BLUE AND GREEN ECONOMY

More policy support is needed to help MSMEs navigate the economic distress. While the good news is that business sentiments are recovering across firm sizes, what further policy actions would help them to offset the negative effects of the pandemic?

In this regard, the first thing that we need is that the moratorium scheme that RBI has announced has to be reworked. This is because one is not paying the cost today but is paying a higher cost tomorrow. Due to this, people have been burdened with debt for a longer period, and the question that comes in is, do we need a longer debt period. Secondly, there should have been an interest holiday on both the sides, i.e., the lender and the borrower, to adjust for the increased debt period since interest costs have an unsustainable burden on them. Loan waivers can be given to them in the form of a waiver of interest cost as most of them are okay to pay back at a later point in time.

The MSME sector requires more tax breaks and tax incentives. Today when we compare it with the IT sector, we see that it is no longer a sunrise and startup industry. Moreover, it hasn't been affected by the pandemic. Then why should they continue to enjoy the benefits of tax holidays and exemptions? These benefits should go back to MSME players, where there is a real need for the same.

Furthermore, MSMEs are across sectors; therefore, one will be looking at focus solutions. Also, there shouldn’t be a gap in the timeline between the delivery of MSME’s product and the time when there is an upswing in business sentiment. In this regard, the government should create a mechanism by which MSMEs operate on a lead model. Credit should be available today so that when the markets become reasonably normal, MSMEs have already started production and meeting the increased demand. They should be helped with additional upfront credit so that by the time demand pulls back, MSMEs are already at the same level contributing to the economy.

ESG, in recent years, has been gaining importance among global investors, and India, in the post-pandemic atmosphere, has a golden chance of making the most of this opportunity. How can India leverage the present opportunity to boost green and blue businesses?

At the end of the day, do the major businesses have the luxury of running the blue and green business. I believe that is the biggest challenge in the situation currently. For example, if I do ESG compliant business, I am sure the cost of doing business will rise. It is not that the solar vehicles are not available, but their cost is higher than their equivalent vehicles run on other fuels. We are not yet in a position where the people are ready to pay more for the additional other benefits. Unfortunately, in a country like ours, people would take shortcuts, beat the system and make it worse. People do not look at the long-term horizon but look for the short-term benefits.

Similarly, the ESG business here have no medium- or short-term benefits, and the industry has not yet geared to take the long-term benefits. So, I do not currently see them having a significant impact in a country like ours, unlike in socially responsible countries like Scandinavia, Northern Europe, etc. The whole cultural and business arguments need to align themselves that say we are ready to look at the longterm benefits and we are prepared to pay for the additional cost because we want to take care of the future. We need to have a dramatic shift in the ideology to have this in the mainstream.