Stimulus package inadequate: House panel

New Delhi, July 28: The stimulus package announ-ced by the government for the revival of the pandemic-hit economy has been found to be "inadequate", according to a parliamentary panel report.

The report of the department-related parliamen-tary standing committee on industry, on the impact of the Covid-19 pandemic on micro, small and medium enterprises (MSME) sector, has noted that the second wave of the pandemic has more vigorously ripped the economy than the first wave, particularly the

MSME sector.

"The committee observes that the stimulus package announced by the government for the economic revival from the pandemic- hit economy has been found to be inadequate as the measures adopted were more of loan offering and longterm measures instead of improving the cash flow to generate demand as immediate relief," it said.

It has recommended that the government should immediately come out with a larger economic package aimed at bolstering demand, investment, exports and employment generation to help the economy, including MSMEs.

In their submission to the committee, various MSME associations have stated that due to a sharp fall in business, most of the MSMEs faced an acute cash crunch and needed immediate liquidity to cope with the unprecedented circumstance.

"It is estimated that almost 25 per cent of MSME loans could slip into default as several MSMEs are finding it tough to draw working capital from banks," the associations told the committee, the report said.