The much needed stimulus that was expected of the budget to revive the economic slowdown was few and far between, said Vel Murugan, president, Hosur Small and Tiny Industries Association (HOSTIA).
Welcoming the extension of the debt restructuring scheme for MSMEs announced in the budget as a much need relief for the sector, HOSTIA has flagged the demands that have gone unaddressed. The debt restructure scheme was one relief that would bring down the monthly commitments of MSMEs. But, the liabilities of the MSMEs had gone up and there was no cash to run the show,” he said.
The MSMEs had sought adhoc loan, a part without security/documentation similar to the scheme in 2008-09 under the Manmohan Singh government, said Mr.Vel Murugan. “There is no cash to run the show, and adhoc loans, with 25% of the loan without security/documentation was given during the global slowdown in 2008-09. We expected something along those lines to revive the sector,” he said.
The industry had demanded waiver on import duty/local duties on machinery. For MSMEs to compete with the world, there was a dire need for technology upgradation and that demanded capital expenditure on machinery. But the import/local duty on machinery needed waiver to enable MSMEs to invest in upgradation. While the losses had gone up, the liability had remained the same by way of standard expenditure such as salaries, bank liability, maintenance among other things. The MSMEs had blamed the “GST as the first culprit” for this slowdown in their sector. The MSMEs here had also demanded waiver on interest on bank loans for the current and the next fiscal. “That was our only way to offset at least 25% of out losses, but that announcement was not made,” said Mr. Vel Murugan.
