Tamil Nadu Boilers Association has sought creation of Rehabilitation Bank or Rehabilitation Cell attached to the lead bank of the district or the State for bringing about smooth revival of the units declared as Non-Performing Assets.
“The MSME sector in Tiruchi region has been in a crisis for the last four years and the COVID-19 crisis has further aggravated the situation for the NPA units that had provided huge employment for the last five decades,” Rajappa Rajkumar, treasurer of Tamil Nadu Boilers Association, said.
Explaining the purpose, Mr. Rajkumar said the accounts of NPA units must be transferred the Rehabilitaiton Bank/Cell after settling the outstanding through one-time settlement (OTS), considering the auction value or present market value of the properties, whichever was less. Units interested in settling the OTS amount shall be permitted to do so immediately.
Those who wanted time must be permitted one year without interest after receiving initial payment of 10% of the OTS amount arrived. Those willing to run the unit in the existing form without further investment, by making the OTS, must be sanctioned interest free working capital term loan, payable in a span of seven years with a moratorium period of one year. Those needing additional facilities must be provided access to equity funds by the government, and further back up by banks. Equity and facilities not exceeding ₹2 crore must be covered under credit guarantee scheme. The OTS could also be converted into interest-free working capital loan payable in seven years with a moratorium period of one year, Mr. Rajkumar said.
The banks could take action if the promoters failed to honour the commitment in line with the proposal.
Promoters who ran the units must be encouraged to form a cluster to take bulk order and distribute among them for coming out of the sickness successfully and early. The case of MSME NPA units in Tiruchi must be given a special consideration as they provided employment, paid taxes promptly and followed other statutory obligations.
As they had become sick due to change in government policies and general recession, sanction of additional limits at lower rate of interest or interest subvention must be given. All NPA units had sold personal belongings, and hence no collateral or other securities must be demanded. The classification of such units must be changed to standard from substandard.
With proper assistance, India could be an export hub for South Asian countries, Mr. Rajkumar said.
Tiruchi had been known as one of the best fabrication hubs in South Asia. MSME units had acquired proficiency in fabrication and machining of heavy and large equipment. Educated and highly skilled entrepreneurs had the expertise for complicated jobs, and skilled and efficient labour was readily available. All types of latest welding technology had been developed thorough Welding Research Institute, BHEL, Tiruchi. The Tiruchi fabrication hub had the manufacturing capacity of around seven lakh metric tonnes per annum, he said.
BHEL Tiruchi had started getting orders. BHEL Ranipet had got good orders for Flue Gas Desulfurisation from thermal plants for the next four to five years. Also, Tiruchi had been identified as a hub for production of defence components as part of Defence Corridor. Tiruchi MSME units had already formed various clusters for undertaking bulk orders from defence and railways, Mr. Rajkumar said.
