The Modi government is likely to announce the much-awaited stimulus package with focus on micro, small and medium enterprises (MSMEs) in the next couple of days. Multiple sources confirmed that the package will be composite. “On the one hand, it will have guaranteed higher working-capital limit for MSMEs, while on the other, more reform programmes will be initiated to attract investment and ease the way for doing business,” a source said. One of the items on the agenda reads ‘Credit Support to MSMEs’, while another says the meeting will discuss ‘Covid-19 related sanctioned/pre-approved emergency credit and reassessment-based additional working capital.’ The meeting will also discuss the status of the moratorium. It may be recalled that on March 27, the RBI announced moratorium for three months on all types of term loans. It was also decided to provide deferment of interest on working-capital facilities. In respect of working-capital facilities sanctioned in the form of cash credit/overdraft, lending institutions are being permitted to allow deferment of three months on interest payment in respect of all such facilities outstanding as on March 1, 2020. The accumulated interest for the period will be paid after the expiry of the deferment period. The moratorium/deferment was provided mainly to enable the borrowers to tide over the Covid-19 fallout. Hence, the same will not be treated as change in terms and conditions of loan agreement due to the financial difficulty of the borrowers and, consequently, will not result in asset classification downgrade. Source: https://www.thehindubusinessline.com/economy/stimulus-package-likely-next-week-guaranteed-higher-working-capital-limit-for-msme-on-cards/article31546254.ece