Gandhinagar, 15 May 2020
Chief Minister Vijay Rupani has announced “Atmanirbhar Gujarat Sahay Yojana”. The two-and-a-half-month (actually 53 days) lockdown has had an adverse effect on small traders, business-employed artisans. The plan is to speed up the recovery and boost the state’s economy.
The government has given interest relief on loans but has not given any tax relief to traders. Traders are seeking tax relief. Many traders were demanding compensation for the goods that had gone bad in the shop in two months. But now traders have to take a loan and pay a small interest and installment.
More than 10 lakh small business-employed professionals in the state including laundresses, barbers, electricians, small grocery shops etc. are included in the scheme. Loans up to Rs. 1 lakh will be provided to such classes by the State Co-operative Banks, District Hakari Banks and Credit Societies at an interest rate of 2% per annum.
The state government will bear 6 per cent interest. The beneficiary will have to pay only 6 per cent instead of the total interest rate of 20 per cent for such loan assistance for 3 years. The remaining 18 per cent interest will be paid by the state government.
If all the traders take a bank loan, they will need Rs 10,000 tax. If 10 lakh traders take loans, the government will pay Rs 600 crore interest. Which really doesn’t exceed 20 crores.
No installment or interest will be payable during 6 months i.e. moratorium period.
Such loans will be provided by 1000 branches of 220 Urban Co-operative Banks of the State, 1400 branches of 18 District Cooperative Banks and Credit Societies for a period of three years. The entire arrangement for getting the loan will be free i.e. the beneficiary will not have to pay the amount of application form or any other fee. Loans can be given to 100 traders from one branch.
The government believes that such loans up to a total of Rs 5,000 crore will be provided. Accordingly, the government will not get more than Rs 900 crore in interest assistance in 3 years.
But the question is, is the government likely to lose an estimated Rs 20,000 crore this year? The government cannot plan for that. Interest is now being offered.