The Karnataka Small Scale Industries Association (Kassia) has urged the Union government to provide direct financial grants to small and medium enterprises (SMEs) by paying 50% of the salaries of these units at least for the next three months.

“This will not only help keep these units and their employees alive but will also stimulate the economy in multiple ways,” the industry body wrote to Union Finance Minister Nirmala Sitharaman.

In the absence of a quick and targeted one-time cash infusion into the sector, some 25 to 30 per cent of the SMEs in Karnataka employing lakhs of people may completely go out of business, it cautioned.

“Unfortunately, the COVID-19 pandemic has again crippled the functioning of the SMEs and we do not see an end to their woes any time soon. Therefore it is imperative that they get some support, especially when supply chains are getting out of sync once again for them,” wrote Kassia president K.B. Arasappa in his letter.

Kassia insisted that the SMEs should be given credit at 4% interest for a period of four years so that they would be able to revive and ramp up production and technology. In addition to this, it requested the government to waive interest payment for three months.

Further, the industry body also sought an extension of GST payments and tax returns filing deadlines for the months of March to June 2021 without penalty.

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