‘Withdraw collateral security required for MSME units under CORUS’

The Tiruchi District Tiny and Small Scale Industries' Association (TIDITSSIA) has urged Chief Minister Edappadi K. Palaniswami to withdraw the requirement of collateral security for MSME units availing utility of the COVID Relief and Upliftment Scheme (CORUS) implemented by Tamil Nadu Industrial Investment Corporation with an allocation of ₹200 crore.

In a representation to the Chief Minister, TIDITSSIA president R. Ilango said the emphasis on collateral security defies the very rationale behind the announcement of the scheme in the backdrop of a critical financial situation faced by the MSME units.

While not asking for additional collateral, the charges on existing primary and collateral security has been extended for units availing the utility of the scheme announced during April by the Chief Minister to meet out capital expenses as well as working capital needs.

The government has specified that the unit availing the loan ranging from ₹ 2 lakh to ₹ 25 lakh must be in standard category as on March 1. While the Prime Lending Rate is 11.95 %, the effective rate of interest for micro and small enterprises is 5.95 % as they are eligible for 6 % interest subvention. For medium enterprises, the effective rate of interest is 8.95 % after deduction of the 3 % interest subvention.

Likewise, the State government must withdraw the pre-condition that only those who do not avail the utility of the Central Government's COVID-19 credit facility, Emergency Credit Line Guarantee (ECLG), will be covered under CORUS. Under the ECLG scheme the applying unit will get a capital finance of 20 % of the outstanding credit as on February 29, 2020, Mr. Ilango pointed.

The State Government must come forward to exempt the MSME units from paying the MODT (Memorandum of Deposit of Title Deed) charges for availing the utility of the ECLG scheme, he said.

The MSME sector in the region, Mr. Ilango said, expects the State Government to bring in large industries to the upcoming 1,050-acre SIPCOT Industrial Estate near Manapparai along the Tiruchi-Dindigul Highway for ensuring a lifeline to ancillary units.

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Printable version | Aug 9, 2020 2:54:12 PM | https://www.thehindu.com/news/cities/Tiruchirapalli/withdraw-collateral-security-required-for-msme-units-under-corus/article31926260.ece

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