MSMEs still reeling from the impact of note ban, GST

The two big bang decisions could determine the fate of parties

March 30, 2019 12:56 am | Updated 08:13 am IST - COIMBATORE

As two former MPs face off for the Coimbatore seat in the Lok Sabha election, two major economic decisions that the BJP-led National Democratic Alliance government took — demonetisation in November 2016 and the introduction of Goods and Services Tax in July 2017 — could prove crucial in this industrial constituency.

While C.P. Radhakrishnan of the BJP faces tough questions on these decisions, his rival P.R. Natarajan of the CPI(M) has been a strong critic of the policies that hit the industry and its workers.

The demonetisation had a major impact on the micro, small and medium enterprises (MSMEs), which were deprived of cash to meet even their day-to-day expenses and had to wait longer than usual for buyers to repay.

Even as the 50,000-plus MSMEs were struggling to recuperate from the note ban, the Centre’s tax reform inflicted a blow far severe than what these industries braced for.

Many MSMEs that were into job order business or were vendors for big industries shut shop as the industries insisted that they would place orders only to GST-compliant MSMEs. And, even for such MSMEs it was difficult to register, says an industry association leader.

The units that had the owner as labourer suffered the most.

Too little, too late

In short, entrepreneurs became job seekers. This will definitely have an impact in Coimbatore in this election, he says. The Government did provide some relief, but it was too little and too late, says an industrialist.

The inclusion of Coimbatore in the Defence Corridor project brought some cheer to the industry. But it remains to be seen whether it would translate into votes.

The city's residents have seen little change in living standards over the last five years, despite the Government's flagship schemes, such as the Smart Cities Mission.

If caste is a factor, Mr. Radhakrishnan, a Gounder, hopes to benefit from the large presence of his community, especially in the rural pockets. Mr. Natarajan is a Brahmin.

In the last 10 Parliamentary elections in Coimbatore, the Congress had won thrice –1991, 1989 and 1984, the DMK twice – 1996 and 1980, the BJP twice – 1999 and 1998, the CPI(M) once – 2009 and AIADMK once – 2014.

In the 2014 Lok Sabha election where the BJP or the CPI(M) were not a part of either of the two big Dravidian party-led alliances, Mr. Radhakrishnan secured 33.61% of the total valid votes to finish second. Mr. Natarajan, who was then the incumbent, polled only 2.91% votes, losing his deposit.

The others in the fray this time are Makkal Needhi Maiam's vice-president R. Mahendran and Amma Makkal Munnetra Kazhagam's N.R. Appathurai, contesting as an independent on a common symbol.

The Coimbatore Parliamentary constituency includes six Assembly segments – Palladam (Tirupur district), Sulur, Kavundampalayam, Coimbatore North, Coimbatore South and Singanallur – all in Coimbatore.

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