 "Kassia wants FM to set up task force to address MSME problems")
"There is a need to restore the stamina and build momentum of the MSME sector to play its contributory role in the nation building with double the vigour," said B P Shashidhar, president, Kassia.
The Kassia members submitted a memorandum to the Finance Minister P Chidambaram during his visit to the city on Saturday.
More From This Section
The MSME sector is made up of about 8,000 items and over 85 categories of items spread out in all states. "At no time the industry has found itself at such a distress as at present and therefore needs urgent attention to preserve its contribution to the economic equilibrium of the state," Shashidhar said in his memorandum.
Over the last 65 years after Independence, the MSME sector has been contributing to about 40 per cent of the manufacturing output, 40 per cent of employment, next only to agriculture and about 35 per cent of the country's exports.
Today, the sector is exposed to a multitude of problems in every facet - infrastructure inadequacy, input deficiency and prohibitive costs, acute shortage of skilled and unskilled persons, totally inadequate credit, prohibitive interest rate, poor connectivity and logistic support and hostile marketing environment and above all policy implementation deficiency, Kassia said.
"The sector is losing inherent strength acquired through the six decades of meticulous planning and policies, and entrepreneurial support. Before the situation worsens, remedial actions need to be taken to avoid the worst, without any further loss of time," Shashidhar said.
He said absence of immediate corrective action at this stage will result in greater damage to the nation's economy. He has also urged the Finance Minister to intervene immediately and take remedial measures to save the MSME sector.
As a measure to find an instant solutions pending the task force studies and positive action, the association has demanded the Finance Minister to take some urgent steps like announcing 2 per cent interest subvention for the loans through financial institutions for a period of one year.
Kassia has also asked the government to launch a factoring scheme to fund state and central public sector units to clear payments pending beyond six months for supplies made.
The association also suggested for release of 20 per cent extra loan for all borrowers without further formalities and restructuring of NPA loan cases for a further period of six months.
"These steps will provide immediate relief to majority of the affected MSME units," Kassia president added.