It will have powers to permit takeover of assets of a sick unit by another

The State government has formed a committee to go into the problems and extent of sickness of Micro, Small and Medium Enterprises (MSME) and suggest measures for their rehabilitation.

The State Level Rehabilitation Committee (SLRC), leaders of MSME associations say, is the first such panel to be constituted by the government.

It will have powers to permit take over of the assets and liabilities of a sick unit by another subject to certain conditions, particularly reopening of the closed enterprise within three months of the sanction/take over.

The committee will insist on the unit taking over the sick enterprise to produce suitable arrangement with bankers for repayment of dues and arrange to settle all arrears to workmen, statutory authorities and government agencies. On its part, the SLRC may convert up to 75 per cent of the outstanding sales tax/VAT and the interest on them into a soft loan.

The loan will be repayable from the start of the fourth year onwards over four years on an EMI basis at an interest of 9 per cent. No interest will be levied on the loan for the first three years, said the government order constituting the panel.

Head of various departments, officials of many government agencies, besides representatives of industry bodies will be members of the Committee. The GO, issued recently, said the Secretary to the Department of MSME will be its chairman.

Besides formulating and approving the package of incentive schemes for sick MSMEs in the State and guidelines for implementing them, the Committee will sanction rehabilitation package to individual sick units recommended by the sub-committee of State Level Inter Institutional Committee (SLIIC).

The GO said Chief Minister Jayalalithaa during a review of the work of MSME department in July 2011 had suggested formation of such a committee and also consulting industry bodies like TANSTIA/CII for identifying number of sick units in the State. If details were not available, the industry associations may be advised to undertake a study.

The SLRC will meet on a quarterly basis to review and monitor the implementation of the rehabilitation scheme of sick MSMEs.

TANSTIA president and member of the committee K.Gopalakrishnan said lots of hopes in the MSME, which provides employment to lakhs of people besides contributing handsomely to exports, rest on the panel. Though details pertaining to sickness in the sector were not available, several hundred units had closed over the last few years. One of the recent studies was in Kancheepuram, which revealed that 45 per cent of the small scale units started in last three years had closed.

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