Tamil Nadu - Madurai   

Centre urged to come out with SSI-specific package

MADURAI: The Central Government should come out with a stimulus package aimed exclusively at boosting the small and medium enterprises sector.

The second stimulus package announced by the Central Government in tandem with the Reserve Bank of India (RBI) on Friday was oriented more towards infrastructure and heavy industries, various trade bodies and associations here have said.

The stringent norms declaring an SSI loan account as non-performing asset (NPA) must be relaxed, KR. Gnanasambandan, vice-president, Tamil Nadu Small and Tiny Industries’ Association (TANSTIA), told The Hindu here on Monday.

Default in payment of even one month’s interest or the equated monthly instalments (EMI), he said, made the SSI unit come under NPA.

This should be relaxed to at least six months as SSIs were facing a cash crunch owing to the global economic recession.

“A bank manager has no power to reverse this decision and it has to go to the regional office,” he said. Prices of petroleum products must also be brought down to the levels that existed six months ago.

Tamil Nadu Chamber of Commerce and Industry senior president S. Rethinavelu termed the measures of lowering interest rates, infusion of additional liquidity, incentives to spur exports, thrust of infrastructure sector and liberalising of external commercial borrowing and foreign direct investment as “proactive.”

The cut in repo rates and cash reserve ratio would ensure availability of Rs. 20,000 crore with banks.

They should, instead of investing in government bonds, utilise the funds to provide credit at cheaper rates to trade and industry.

He also called for specific initiatives to boost SMEs, which were facing a recessionary trend. The stimulus package should be used to spur growth in agriculture sector.

P. Sitaraman, former president of the Kappalur Industrial Estate Manufacturers’ Association, said that credit flow for existing units must be eased.

Existing units could access additional credit only if their performance was good.

The balance sheet of more than 80 per cent of the SSI sector would be in a bad shape when this fiscal ended on account of the global economic crisis.

Besides a two-year moratorium on repayment of principal amount, the Central Government must provide a 50 per cent subsidy on loans during this period, he said.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Centre urged to come out with SSI-specific package
Jayalalithaa demands police officers’ dismissal
Book on Sivaji Ganesan released
Temple for Avvai on the cards
Welcoming New Year with a difference
It’s enthusiasm from the word go as students learn to use dictionary
Water level
Awareness camp on climate change
Voters cast doubts on secrecy of ballot
Beauty going down the drain madurai matters
In Madurai Today

Copyright © 2009, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu