Special economic relief package announced by PM welcome move to allay fears of deep economic recession in India

Ms. Meghna Suryakumar, Co-Founder & CEO, Crediwatch has given her reaction over the Prime Minister’s speech given yesterday addressing COVID-19 situation. She said: “The special economic relief package announced by the Prime Minister is a welcome move to allay fears of a deep economic recession in India. The focus on liquidity, laws, labour and land - should help small businesses plan a smoother recovery as the lockdown eases. Similar to the announcement in UP, we expect a relaxation of labour laws in other states and possibly, amendment to IT laws for seamless remote working procedures. Since the lockdown, there has been a significant increase in the demand for data centres for last-mile connectivity of essential services - which further enforces this requirement from this year's Budget announcement.

One of the pillars highlighted by the Prime Minister - technology-driven systems - for a self-reliant India - has significant potential to assist with speedier recovery. Our clients tell us that several small lenders are evaluating Digital Lending and Onboarding solutions to underwrite and disburse faster. SMEs are also registering and accessing online lending platforms for working capital access. In the next few quarters, we expect to see a significant rise in cash-flow based lending (driven primarily by large PSBs) and higher volumes on invoice discounting platforms, which should ease liquidity pressures off small businesses.
The push for 'local' is an effort in the direction to balance out the burden from the upcoming fiscal deficit on back of the economic package. While it is a step in the right direction, the implementation is yet to be seen.”