WB units for holiday on loan repayment

Units also seeks funds for technology upgradation

Faced with the acute problem of raising funds, the Federation of Small and Medium Industries (West Bengal) has sought a moratorium on loan repayment by SMEs for a period two years.

The association said it would request the state government to help them get concessions from the lenders. The state, which is trying hard for an industrial resurgence, has close to 50,000 registered SSI units, in engineering, chemicals, jute textile, handloom and food processing. West Bengal along with Maharashtra, Uttar Pradesh, Karnataka, Madhya Pradesh, Punjab and Jharkhand constitutes more than 55 per cent of the exports from the SME sector.

FOSMI president Pradeep Rawat pointed out that despite the fact that SMEs are among the largest employment generators in the country, the sector is continuously fighting against unfair rules. According to Rawat, the banks continue giving loans to SMEs at rates much above the prime lending rate.

"We are paying interest at 11-12 per cent, while large business houses are getting funds at sub-PLR rates. The cost of borrowing for large businesses is just 6 to 7 per cent. Even SME's with good track record cannot get sub-PLR rates," he said.

Besides, he pointed out that most of the small units in the state did not have access to funds for technology upgradation or to buy state of the art machines.

Rawat suggested that the state government should take the initiative in ensuring that the SME sector gets a two-year moratorium on loans for upgrading technology. "This is a must for the survival of SMEs in the state," he said.

FOSMI president also came down heavily on the special economic zone policy. "SEZs will kill the SME sector which is now generating so much employment.

The benefits within an SEZ is more than what SMEs are getting. With big business houses taking over SEZs, where will the SMEs go.