The Tamil Nadu government will soon sign 20 MoUs with various firms, according to Industries Minister M.C. Sampath.
“Even in the midst of the COVID-19 pandemic, we recently signed 17 MoUs and will soon be signing 20 more,” he said at a virtual meeting organised to release a report, ‘Covid-19 Outbreak and the Micro, Small and Medium Enterprises (MSMEs): A Study of Tamil Nadu’. He said the State was taking measures to address the problems of the MSME sector.
The report, authored by Subash Sasidharan and Santosh Kumar Sahu of the Department of Humanities and Social Sciences, Indian Institute of Technology, Madras, and R.K. Jeyabalan of ConsoTree, a private agency, details cash flow, labour issues and layoffs, future prospects, and awareness of policy support programmes.
The report, based on the data from over 1,200 MSMEs of the manufacturing, trading, and services sectors, shows these units are struggling to recover in the wake of the COVID-19 crisis.
Credit support
The study suggests that there be targeted credit support policies for the micro segment; credit be extended not just to the existing borrowers but also new borrowers, given that funding needs are likely to increase with the looming economic crisis; and the payment of the pending GST compensation. The study notes the MSMEs are confronted with high business costs, especially rents and electricity expenses. This can harm profitability and sustainability in the State. Concessions to reduce such costs/reduction in power tariffs for the MSMEs should be considered and income support and temporary direct cash payments should be provided to vulnerable workers, including women and migrant workers. The study suggests subsidy be given to the MSMEs to make personal protective equipment, masks, gloves and medical kits.
