The Hindu Business Line : AP Govt urged to have fresh look at revival of sick units

Hyderabad, June 23 The Andhra Pradesh Incipient Sick SSI Federation (APISSIF) and the Federation of Andhra Pradesh Small Industries Associations (FAPSIA) have urged the State Government to make it mandatory to follow the Government and State-Level Inter Institutional Committee’s (SLIIC) recommendations for revival of sick units.

In a letter submitted to Ms J Geeta Reddy, Minister for Major Industries, the federations said that the Andhra Pradesh State Finance Corporation (APSFC) and commercial banks such as State Bank of India, State Bank of Hyderabad, Andhra Bank and others were not adhering to suggestions of the SLIIC, convened by the Reserve Bank of India, for the revival of the sick units.

They alleged that the Corporation was resorting to seizure of running, non-wilful default of SSI units on minor lapses. The letter also states that units were being sold off at a much cheaper cost.

SIDBI norms

“Earlier, as per the SIDBI guidelines, APSFC operated the rehabilitation and sick revival (RSR) cell. Before deciding any unit as sick or a non-performing asset, a committee had to go into the facts for the causes and extended their services to the management for the revival. But of late, this is not happening and we propose the RSR cells be re-operational,” the letter said.

According to Mr APK Reddy, President of the Andhra Pradesh Incipient Sick SSI Federation, even after the State Government had deposited Rs 6.7 crore with the Corporation for the past four years for revival and rehabilitation of sick SSI units, not a single unit has been revived.

“Another interesting point is that though the State Government is a major stakeholder in APSFC, there is no representation from the Government on the board to safeguard the policies, as per Section 10 (b) of the State Financial Corporation Act (SFC Act),” Mr Reddy said.

Both the federations, have requested two directors from the Government be appointed, of whom one should be a person who has knowledge or experience in SSI matters.

Appointment of directors

“Ideally, it should be people like the Principal Secretary, Industries and Commissioner of Industries as they are well-versed with the policies that the Government wants to implement,” he said.

The letter also said sick SSI units under revival are not getting support from the Corporation for working capital term loans. It added that APSFC should send reports to the Government and Commissioner of Industries on the progress of revival of sick units.

More Stories on : SSI | Sick Units | Andhra Pradesh

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