Considered one of the leading Tier-II destinations in the country for Micro, Small and Medium Enterprises (MSMEs), Visakhapatnam has units dabbling in engineering, lathe work, coir processing, handicrafts, toymaking, fabrication, casting, machining and allied fields.
The city’s robust base led to the mushrooming of MSME units in and around the region. However, in the last few years, MSME entrepreneurs have been facing one setback after another, beginning with Cyclone Hudhud in 2014 which forced them out of action for some time.
Just when the industry was hoping to get back on its feet, came the demonetisation decision in November 2016, and later the decision of the Central Government to switch over to the GST regime in 2017. Two years hence, the economy began witnessing a slowdown in 2019 which has also affected the MSME units.
The situation came to such a pass that in 2019, major manufacturing industries like Visakhapatnam Steel Plant imposed severe cuts in production. Of late, the order book position by major industries including VSP, HPCL Visakh Refinery and BHEL (Heavy Plate and Vessels Plant) has improved. Prior to Hudhud, the industry was also badly hit by a power holiday in 2012 and the Samaikyandhra agitation.
Now, the State Government’s decision to make Visakhapatnam the Executive capital has given fresh hopes to the MSMEs on the prospects of major investments coming into the region in the near future.
MSMEs are a major contributor to GDP and employment creation. The district has an estimated 14,000 units of which 6,000 are located in the city. The units have provided jobs to an estimated 25,000 to 30,000 people. The district has several industrial estates at Atchutapuram, Parawada, Kancharapalem, Gajuwaka, Autonagar, Pedagantyada, Gambheeram, Gurrampalem and Rachapalle.
The MSME sector has a plethora of opportunities with the government offering several incentives. "We have already set up two MSME parks at Gurrampalem and Rachapalle. At Gurrampalem park which is developed in 45 acres, plots have been allotted to 182 units," District Industries Centre General Manager Ramalingeswar Raju told The Hindu .
Though some allotments have been made at Rachapalle in Makavarapalem mandal, efforts are on to pacify farmers who are protesting against the project in the area. There is no documentation on the number of unregistered micro and small units.
Though there is no quota for local MSMEs for e-procurement, the units are getting preferential treatment, according to Visakha Autonagar Small Scale Industries Welfare Association president A.K. Balaji.
He said access to easy finance has become a herculean task for them though there are no problems in securing orders. Though under the Mudra and 59-minute loan schemes, assistance should be given without any collateral security, due to insistence on documents and adhering to RBI guidelines, sanction is not that easy, Mr. Balaji lamented.
He said they were being forced to shell down interests ranging from 9% to 15% and sought hassle-free loan sanction with less documentation and timely release of payments from major industries. He also wanted implementation of the decision of a plant-level committee of Visakhapatnam Steel Plant to give orders up to ₹50 lakh if five local firms come to an understanding.
Mr. Balaji wanted establishment of Electronics Manufacturing Clusters and product-specific industrial estates and MSME parks to encourage micro, small and medium entrepreneurs.
