 "14,000 MSMEs affected in rains and flood in Tamil Nadu, says Kalraj Mishra")
Torrential rains and the flood have resulted in severe loss to around 14,000 micro, small and medium enterprises (MSMEs) in Tamil Nadu, which is a hub of MSME industry in the country, said Union Minister for MSME Kalraj Mishra.
Mishra said that he will discuss the issues and concerns raised by the MSMEs in the state with Union Finance Minister Arun Jaitely, who will be here in Chennai on Sunday.
After visiting various industrial areas affected by the recent floods, Mishra told reporters that the MSME Development Institute (DI) in Chennai has prepared a detailed assessment report based on discussion with industry associations on the extent of loss in MSME sector.
About 10,000 micro units have suffered losses, out of which 95 per cent are service enterprises which produce components for small and large enterprises. About 3,000 small units and another 1,000 medium enterprises which are manufacturing precision auto-components, leather goods and medicinal products have been affected, he added.
The state has around 3.31 million enterprises that employ around 8.08 million people, and is only behind Uttar Pradesh and West Bengal, according to the ministry's annual report for 2014-15.
The major issue that needs to be addressed is easy access to credit and possible restructuring of existing loans. Issues relating to bank credit come within the administrative responsibility of the Ministry of Finance, which will be taken up with the Finance Minister, he said. The Centre will also work with the state to address the issues of these industries.
The minister held meetings with various MSME organisations and also the representatives of Reserve Bank of India, SIDBI and other banks on Saturday. The details would be discussed with the Finance Minister, he said. Once the calamity notification is issued, the banks will be ready to come out with help to these industries, he added. The MSME ministry would support initiatives of the Government of Tamil Nadu in the revival of the affected MSME units.
Also Read
The extent of loss suffered by the industry is difficult to assess immediately, said Anup K Pujari, secretary with the ministry.
The state government is collecting relevant data on this aspect.
The ministry said that it will also conduct its own assessment, though during the visit the minister said that almost two-third of the machines have become defunct. The loss is also in terms of employment to the tune of 50,000 numbers in the micro enterprises alone and the affected units would require several months of lead time even to recommence their operation, it added.
According to industry sources, while the extent of loss is yet to be known, the rough estimate presented today to the ministry was of around Rs 5,000-10,000 crore of loss immediately due to the flood, apart from the other financial issues expected to come out gradually.
Around 34 representatives of MSME industry met the minister today.
The demands put forward by the Tamil Nadu Small and Tiny Industries Association (TANSIA) suggested that the government should waive loans up to Rs 5 lakh for MSEs along with excise duty, service tax, ESI and PF payments being delayed for one year. Additionally, PF Department can release 50 per cent of the individual contribution amount for employees. TANSIA also said that the government should insist on all PSUs and corporate houses to release the SME payments immediately. Furthermore, the body said that the government should instruct all insurance companies to settle claims without any delay and release 50 per cent of all the assessed value immediately.
They also asked for relaxation of non-performing asset (NPA) norms for one year for units already declared as NPA and the units which are likely to become NPA as on October 1, 2015 so that they can reschedule and restructure their loans.