CHENNAI: The MSME sector in Tamil Nadu has expressed concern that the Union Government has paid little attention to an industry which has been bleeding in the state for the last 15 months. This industry has faced three major breakdowns – a flood that ruined more than 14,000 units causing losses to the tune of Rs 11.8 lakh per MSME, a cyclone which shattered many small units working out of sheds and, more recently, demonetisation which hampered their businesses.
In order to make MSME companies more viable and also to encourage firms to migrate to company format, the Finance Minister proposed to reduce the income tax for smaller companies with annual turnover upto Rs. 50 crore to 25 per cent. But the industry feels this is not what they want now and their core problems are still not been addressed despite ministers visiting them and several associations doing analysis about their issue. Around nine key members in the MSME sector with whom The Hindu spoke to said that their problems are vast and a reduction in income tax is of no use to them.
The Industrial Estate Manufacturers’ Association said that the budget was disappointing. The association’s Senior Vice President, G.K. Basha, said, “MSMEs are the back bone of our economy and there was no reduction in interest rate. There was no relief granted for the sector which was hit because of demonetisation.” He added, “Non inclusion of MSME in the National Disaster Management Fund is very unfortunate.”
“There is no specific announcement for MSME related issues for the existing entrepreneurs like reduction of interest rate, increase of NPA norms from 90 to 180 days and Sarfaesi Act which needs to be exempted upto Rs. 2 crore,” said C.K.Mohan, General Secretary, Tamil Nadu Small and Tiny Industries Association.
V.S. Narasimhan, Secretary of Federation of Associations of Small Industries of India, said, “Post floods, entrepreneurs have less access to credit and are thriving on money borrowed from friends and financiers. Infrastructure is poor in the industrial estates – no efforts are being made to provide better facilities.” He added that MSME in the state are not able to market their products and this should have been addressed. “Some kind of package would have helped us,” he said.
Tamil Nadu has a strong MSME base with investments of Rs 67,130 crore providing employment to more then 69 lakh persons. The state has 11.5 lakh registered units and more than 4 lakh unregistered units.
Correction
This story was corrected for errors
