Tamil Nadu

MSMEs have something to cheer about

The Micro, Small and Medium Enterprises across Tamil Nadu, who have been crying for attention for years, were happy with a slew of announcements in the Union Budget.

In her Budget speech, Finance Minister Nirmala Sitharaman said the government had asked the Reserve Bank of India to extend debt restructuring window for MSMEs by a year to March 31, 2021. The restructuring window was to end on March 31, 2020. More than five lakh MSMEs benefited from restructuring of debt permitted by RBI in the last year.

K.V. Kanakambaram, president, Guindy Industrial Estate Manufacturers Association, called the Budget a historic for the MSME sector. “The proposal to extend restructuring by a year is a welcome move and this has been our long term request,” he said.

Indian Chamber of Commerce and Industry, Coimbatore president V. Lakshminarayanasamy, also said that the extension of time for restructuring of stressed loans for MSMEs will help. “The move to develop the electronic industry will hopefully bring opportunities to the domestic MSMEs,” he said.

R. Selvam, Thirumudivakkam Industrial Estate Manufacturer Association secretary, said the subordinate debt for MSME will support to improve the working capital inflow. “But we were expecting a repayment holiday from banks due to slow down,” he said.

S. Anburajan, president, Tamil Nadu Small and Tiny Industries Association, said that each announcement that was made by the Finance Minister would certainly boost the sector. He added that some of the expectations of MSMEs like increasing the NPA norms from 90 to 180 days, implementation of small factories Act, exemption upto ₹10 lakh for women entrepreneurs, exemption for Sarfaesi Act up to ₹2 crore for MSMEs were not considered.

MSMEs in Tamil Nadu unanimously lauded the announcement pertaining to raising the turnover threshold for audit of their accounts. At present, businesses with a turnover of more than ₹1 crore are required to get their books of accounts audited.

To make it easy for small retailers, traders, shopkeepers who comprise the MSME sector, the Finance Minister has proposed to raise threshold limit to ₹5 crore. However, this will apply to only those businesses which do less than 5% of their business transactions in cash.

Coimbatore District Small Industries Association (CODISSIA) president R. Ramamoorthy said if invoice financing was available from NBFCs, the subordinate debt announced by the Finance Minister will help ease credit needs of MSMEs. However, there is no direct effort to boost demand for these units. The Budget has addressed some of the concerns of the sector. “The MSME sector should have got the thrust that the agriculture sector received,” he said.

V. Krishnakumar, president, Southern India Engineering Manufacturers’ Association, pointed out that the reduction in corporate tax will not benefit the MSMEs as most of the units are partnership or proprietorship firms.

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Printable version | Feb 23, 2020 11:12:15 PM | https://www.thehindu.com/news/national/tamil-nadu/msmes-have-something-to-cheer-about/article30716933.ece

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