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Covid-19: AP Govt to Clear All Industrial Incentives, Waive Power Charge for 3 Months to Boost MSMEs

File photo of Andhra Pradesh Chief Minister YS Jagan Mohan Reddy.

File photo of Andhra Pradesh Chief Minister YS Jagan Mohan Reddy.

The state government has also decided to provide working capital loans to MSMEs at lower interest rates. A fund to the tune of Rs 200 crore would be created to lend loans between Rs 2-10 lakh.

Amaravati: The Andhra Pradesh government announced a slew of measures, including clearing 50 per cent of all pending industrial incentives of Rs 904 crore in the current month itself and waiving fixed electricity charges for three months, on Friday to ensure that the micro, small and medium enterprises (MSMEs) in the state reopen during the ongoing COVID-19 crisis.

The state government has also decided to provide working capital loans to MSMEs at lower interest rates. A fund to the tune of Rs 200 crore would be created to lend loans between Rs 2-10 lakh, it said in a statement.

The YSR Congress Party (YSRCP) government in the southern state is working on a specific plan with the relevant departments and guidelines will be issued soon, it added.

These decisions were taken at a high-level meeting chaired by Chief Minister Y S Jagan Mohan Reddy on Thursday in order to pump life back into the MSME sector of the state.

Minister for IT, Commerce and Information Technology Gowtham Reddy, Chief Secretary Nilam Sawhney and other senior officials were present at the meeting.

"This will help the MSMEs cope with the economic impact of COVID-19. A total of 97,400 MSMEs, which employ over 9.7 lakh people, to benefit from these decisions," Gowtham Reddy said.

The government said disbursement of pending incentives would inject cash into the system as the economic impact of the spread of COVID-19 and the consequential nationwide lockdown have harmed the financial capability of a lot of MSMEs, especially the micro and small industries.

The state government has decided that all pending industrial incentives to MSMEs, amounting Rs 904 crore, will be cleared in two phases. About 50 per cent of it will be cleared in May and the rest in June.

Of the total pending incentives, an amount of Rs 827 crore was left behind by the previous government, the statement said.

To reduce the burden on MSMEs, the government has also decided to waive the fixed electricity charges that they would otherwise have to pay, irrespective of whether or not they have consumed any power during the lockdown, according to the norms.

"All Fixed Charges/Minimum Demand Charges that over 97,400 MSMEs would have to pay for their electricity for the months of April/May/June will be waived by the government," it said.

The same will be deferred in the case of all other enterprises for the said period, the government said, adding that this would help the MSMEs to restart operations.