Tamil Nadu Budget 2021

Budget announcements not adequate, say MSMEs

The Micro, Small and Medium Enterprises (MSMEs) feel that the announcements made in the maiden budget by Finance Minister P.T.R. Palanivel Thiaga Rajan were not sufficient for the ailing sector. Whatever sops he announced were good but not sufficient to feed this industry which had been battered by natural calamities and the COVID-19 pandemic, said heads of various industrial estates.

In his speech, the Finance Minister said the government recognised that access to credit from banks and Financial Institutions (FIs) was a critical issue. It would, therefore, launch a State-level credit guarantee scheme to enable more MSMEs, particularly micro enterprises, to access credit.

He added that a digital data driven credit rating system for MSMEs would be established to enable FIs and new-age fintech companies to lend more to MSMEs based on their business potential. TAICO Bank would be repurposed to help MSMEs. Apart from this, the announcement to amend Registration Act to facilitate online registration of memorandum of documents without personal appearance would ease access to credit. Mr. Rajan also said the government would handhold MSMEs which wanted to raise equity capital from stock exchanges and the cost of listing up to ₹30 lakh would be borne by the government. The government, based on advice received from the Economic Advisory Council, would launch an innovative scheme wherein MSMEs and their creditors, would be facilitated to reach agreement on restructuring their liabilities through tripartite forums at the district level. On reaching agreement, such units would be linked to top-up loans by financial institutions with support from government credit guarantee. “The announcements are inadequate to recover the self-employed entrepreneurs who are not covered from Union government’s stimulus packages,” K.E.Raghunathan, convenor of Consortium of Indian Associations said.

“We had requested loan, equivalent to six months EMI, without interest so that those who are unable to pay EMI can avail the same, sought a stipend of ₹6,000 per month for 6 months to fresh graduates to undergo training in MSME and gain employable skills among others, but none of that was heard,” he added.

A section of MSME owners hoped that the government would come out with more announcements and incentives once the panel chaired by retired IAS N.Sundaradevan submitted its report.

R. Selvam, secretary of Thirumudivakkam Industrial Estate Manufacturers Association, lauded the government’s plan to launch affordable rental housing complexes for MSME workers in Chennai and Coimbatore initially and later in other clusters.

The Coimbatore District Small Industries Association has welcomed the announcement regarding creation of a defence components’ manufacturing park in Coimbatore on 500 acres. The association commissioned a defence incubation centre. “If there are large companies at the proposed park, the MSMEs here will stand to gain,” said the association president MV Ramesh Babu.


Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Nov 28, 2021 12:19:44 AM | https://www.thehindu.com/news/national/tamil-nadu/budget-announcements-not-adequate-say-msmes/article35906140.ece

Next Story