The Government’s Atmanirbhar Bharat initiative has recognised “Infrastructure” as one of the five pillars. This is an acknowledgement of the sector’s key role in India’s development and large scale employment generation.
The extension of up to six months to be given by GoI Agencies is a welcome move since many projects across the nation were affected due to the sudden disruption caused by the pandemic – much of this such as lockdown was beyond the control of contractors.
The move to allow government agencies to partially release bank guarantees to the extent of completed contract will definitely improve the industry’s cash flow situation, especially in case of smaller and mid-sized contractors.
The measures for MSMEs such as revised definition or classification, collateral free automatic loans, subordinate debt-based scheme and equity support will provide an impetus. It must be remembered that many such MSMEs supply various construction material to the infrastructure sector. A strong MSMEs sector is important to the infrastructure sector and overall national economy.”
