Just pay them their dues.

In May, Finance Minister Nirmala Sitharaman presented an economic stimulus package worth Rs 20 trillion in five instalments. The first item in the package was, "Collateral free loans of Rs 3 lakh crores (Rs 3 trillion)  for MSMEs-- a move that'll enable 45 lakh (4.5 million) units to restart work and and save jobs." MSME stands for Micro, investment of up to Rs 10 million and turnover up to of Rs 50 million, Small, investment of up to Rs 100 million and turnover of Rs 500 billion, and Medium Enterprises, investment of up to Rs 500 billion and turnover of Rs 2.5 billion. According to this definition 99% of businesses in India are now in MSME category "enabling them to access various sops such as concessional finance, though the main benefit of excise duty relief has been lost ever since the GST regime was implemented". The annual report by the MSME ministry says that the entire non-agricultural informal sector consists of 63.4 million units "contributing 29% of gross domestic product (GDP)", wrote Prof R Nagaraj and Vikash Vaibhav, but "there were 1.6 million registered enterprises, employing on average six workers" so that "only a small creamy layer of MSMEs garnered most of the benefits". In a meeting with Sitharaman banks pointed out that many small businesses were not applying for these loans because they could not pay stamp duties levied by states, wrote Shayan Ghosh. "A fear of closing down is palpable. India has over 60 million MSMEs and some estimates suggest that 10-15% of them could wind up during the year," wrote Gautam Das. "The Indian Express recently reported that banks had sanctioned 43% of the targeted Rs 3 trillion" under Emergency Credit Line Guarantee Scheme (ECLGS) as on 23 July, but a study by the International Finance Corporation in 2018 showed that "of the overall MSME debt of $1.1 trillion, 84% is financed from informal sources". An analysis of 961 MSMEs showed that only 3 micro, 25 small and 48 medium enterprises managed to secure a new loan, whereas 63 out of 347 large companies were given new loans. While the government collects taxes even before companies can earn a profit, government owned companies are extreme laggards when it comes to paying their suppliers, wrote Tanya Thomas. "Business owners said if governments pay the dues on completed work, much of this working capital pressure can be eased." Comparing with the period after demonetization in 2016, "it is likely that economic growth over the next few months would get over-stated", wrote Pranjul Bhandari. This is because "India only gauges the informal sector once every five years through survey, and then revises past GDP growth data" so the government extrapolates growth data from the formal sector to the informal sector. When there are no data, jumla wins every time. Brilliant strategy.