MP plans exit scheme for small units

To revive small-scale industries, the Madhya Pradesh government has decided to offer an exit plan to the ailing small units.

According to the plan, the sick units will be given the option to sell or lease their ailing units without going into a lengthy documentation process. They will also have an option to choose the rehabilitation package offered by the state government, provided the unit is viable.

The government is likely to ask the public sector banks to review their credit schemes for small-scale industries.

The blueprint of the exit policy had been prepared and the state government had already discussed employment issues with the public sector banks, officials said.

According to sources, the policy will do away with the Digvijay Singh government's policy towards the small-scale sector, which was proving a bottleneck.

The government has extended a Rs 1,425 crore credit to small industries. Of the 78,066 small units in the state, 12,000 are sick. These units, if revived could provide employment to over 800,000 people, officials said.

The new policy would also help banks recover their dues and finance new units, they said. "The state level inter-institutional committee, a sub-committee of the Reserve Bank of India (RBI), has prepared a simple format to ensure an exit route for sick industries," sources said.

Of the Rs 16,084 crore credit provided to industries in the state, Rs 900.93 crore has been sanctioned to small units. However, according to a RBI study, the bank credit to the SSI sector has declined.

"The financial institutions and entrepreneurs in the state have lost Rs 358 crore and Rs 400 crore, respectively. We had demanded an exit policy to revive ailing small units, but the previous government did nothing during the last 10 years," said RS Goswami, member of the state-level bankers committee and president of the Madhya Pradesh Laghu Udyog Sangathan.

"We again raised the demand at the 114th state-level bankers committee held recently. The exit plan for small units are likely to be cleared soon," he added.

Goswami also said banks were ready to provide loans to artisans and cottage industry but they were not considered part of the small-scale sector.

Several industries including transformer repairing units, engineering units, ancillaries to Bharat Heavy Electricals Ltd had been pushed into the red because of delayed payments and an unco-operative government, said an industry owner here.

SLIC committee chairman VN Saxena echoed the feeling and urged the state government to make payments to ailing units as soon as possible.