Q&A library

Is there any possibility for the interest rates of MSME/Business loans getting reduced on account of the difficulties being faced due to the Pandemic, especially by small and medium businesses?
Questioned by ARYA M A, KERALA
As of now, there has been no interest reduction decision/announcement by the Government/RBI/any other statutory organisation. Since, such decisions are controlled by the RBI, the solution for the same has to come from them. The RBI had however, announced a "moratorium period", to ensure that the businesses can avail the same and have more time to pay off their outstanding dues. For knowing more about the moratorium period, you can contact your bank or NBFC regarding the same. The RBI has however, increased funding for the banks and the NBFCs to enable them to lend to the small and medium businesses; which will lead to cash flow into the economy and take care of the cash crunch being faced by such businesses in the current pandemic situation. Thus even though there is no direct interest reduction, there are many measures taken by the Government and RBI and many new class of products introduced by various Financial Institutions to help the small and medium businessmen and women.

As a result of COVID -19, Companies are forced to reduce pay which is quite understandable. But at the same time some Companies have increased working days with salary reduction. Is it an ethical and legally complaint practice? Are there any govt guidelines on this..? Are these kind of measures really needed to Restart India?
Questioned by VAISHNAV S, Kerala
Companies in the current situation are facing extreme conditions to survive. In a normal situation, legal and ethical standards may be viewed differently. In a pandemic situation - while it is imperative to honour the clients engagements , on time salary and vendor payments etc., as long as the organisation gives a fair picture of finances of organisation, keeps the employees informed and explains the rationale for any kind of steps taken, they should have the opportunity to do what it takes for the business to survive. Business owners should always ensure that their actions do not violate any enforced restrictions of respective state and central governments.

How to apply for business-loan to start a business?
Questioned by Rakhi kr, Kerala
"At the very starting stage of a business, it is advisable to keep loans and other liabilities to a minimum. If you can ‘prove’ your business for the first 3-6 months without a loan (or by availing small loans from family members), it could be the best for you. In short: avail a loan to expand your business; not to experiment your idea. To apply for a business-loan anywhere, you need to have your business idea drafted on paper. Such a document is called a ‘business plan’. In this plan, you need to clearly mention what business you intend to do (what product or service you intend to sell), who your customers are, how you intend to make money out of your business, and by when. This Business Plan will not only help visualize and explain your idea to others better; it will also help the Bank or Micro-finance company or Investor make a sound assessment of your idea and offer you the loan with confidence. "

Considering the present COVID-19, can a company restrict the employees from availing their entitled leaves? If it does so, can it be treated as Human Rights violation and can action be taken against the company?
Questioned by Antony Joshy, Kerala
The current situation is unprecedented and while most business owners are doing their best to manage there is a definite need by small businesses for cash to survive and stay afloat. In this situation what is important is the communication from the management to their teams and to keep the employees informed about the state of business. Overall the Industry is moving towards revised leave structures as the older ones are not applicable in a pandemic situation. Some of these includes stress leaves , family leaves, non paid / lumpsum paid sabbatical leaves along with mandatory leaves for Covid +ve diagnosed employees in some states. With respect to Human rights violation - it may not be applicable as long as the leaves are fairly discussed and agreed with the employees.

As a result of COVID-19, a large number of skilled, unskilled manpower have returned to our country. Out of those many have lost their jobs too. So when we say Restart India, How can this surplus manpower be used effectively? Will the oversupply of said manpower affect the Industry pay-scale?
Questioned by VAISHNAV S, Kerala
A massive restructuring of the very design of the way industries manage would be required. This would have to be made possible with large scale PPP (public private partnership projects). Also, FDI is allowed in most of the sectors, the large scale projects should accommodate the surplus manpower and absorb unemployment to a large extent that has been created by the pandemic. Where payscales are concerned - about 10-15% variation can be expected but considering the volumes this is quite insignificant. However in the immediate future the biggest job creators will still be small and medium size business, startups, agriculture and e-commerce led businesses.

What should be the possible strategies to get back on the growth track; post lockdown period for an organization as a whole with diversified products?
Questioned by Prakamya Sharma, Rajasthan
"The lockdown has impacted different types of businesses in different ways. Having said that, if we are to draw a single common strategy that should be in the minds of all businesses alike, it would be-- ‘to go digital’. Let’s look at it this way-- the very purpose of lockdown is to distance people from each other. In a world where physical distance between people is made mandatory, adopting technology into business becomes a necessity. When we say ‘technology’, it could be anything simple. From exploring ways to reach out to your customers via Whatsapp, to using Google Forms to send quick surveys to understand your customers, there are plenty of simple, free, and effective ways to get your business starting on the technology journey. As a must, please ensure that you are able to receive payments from your customers via digital wallets like GooglePay, PayTM etc."

How many months will it take for the market to recover or become back to normal from this pandemic? Will unsecured loans be easily available post pandemic?
Questioned by Challa Tharun Kumar, Telangana
Recessions or economic downturns are a part of life and a natural economic cycle. Though it is unprecedented, it doesn’t mean that the market won’t make a recovery. Many financial institutions / NBFCs are gradually taking numerous measures to provide unsecured loan schemes to help customers. No additional security is required for such schemes / customers. Financial institutions/ NBFCs provide unsecured loans based on the borrower’s creditworthiness and previous repayment cycles. As a result, they come with higher interest rates and require higher credit scores. They will analyse the situation and subject to your eligibility, disburse unsecured loans.

How can Restart India Campaign help the customers?
Questioned by Madhusudhan Rao Duggirala, Telangana
The major focus of our campaign is to help our website visitors gain information, knowledge and help in the time of pandemic, where a lot of confusion is present among the general public. Through this campaign, we aim to help people empower themselves with information regarding the various aids, help and support which is available to them from various avenues.

What is the approved deadline for filing the IT returns?
Questioned by Stephen, Kerala
The government has extended ITR filing deadline for FY 2019-20 to November 30, 2020. The extension has come after the government, in March, extended various income tax-related deadlines for individuals to June 30, 2020 via an ordinance dated March 31, 2020. The decision of extension of deadlines to file ITR for the FY 2019-2020 has been taken in view of the ongoing COVID-19 pandemic. The Income Tax department has also allowed assesses to claim deductions in capital gains arising out of investments, construction and purchases made till 30 September 2020.

What are the different ways to raise fund for the business without surrendering any collateral?
Questioned by Keerthi Ganesh, Tamil Nadu
"If you don’t have any collateral and you don’t plan on signing for the loan personally, your options are mostly limited to smaller loans. 1. Crowd funding is one of the newer ways of funding. It’s similar to taking a loan - pre-order, contribution or investments from more than one person at the same time. Those giving money will make online pledges with the promise of pre-buying the product or giving a donation. 2. Self-funding, also known as bootstrapping, is an effective way of financing, especially when you are just starting your business. You can invest from your own savings or can get your family and friends to contribute. In most situations, family and friends are flexible with the interest rate. 3. Angel Investment: Angel investors are people with a huge amount of capital and are willing to invest it on over the edge business ideas. 4. Government Programs - that offer capital are an excellent way to source funding for your business. You are required to submit a plan that can be accepted by the assigned entity. Once your plan has been scrutinized and approved, you will be provided with the funds to start up your business."

#RestartIndia Response Network
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