The Hindu Business Line : Manufacturing council to take up MSME woes with PM

The National Manufacturing Competitiveness Council (NMCC) of the Ministry of Commerce & Industry, which heard the views of select MSME associations about the impact of the economic slowdown on them, will also hear the views of the larger industries before taking the views of both the sectors to the notice of the Prime Minister for a decision.

Common view

These associations in the country also shared a common view as to what ails the industry at present and how the sector could be helped to tide over the current downturn, according to Mr D. Gandhikumar, President, Tamil Nadu Small and Tiny Industries Association (TANSTIA), Chennai.

Speaking to Business Line from New Delhi on Wednesday, after participating in a meeting convened by the NMCC to discuss the extent of impact of the economic slowdown on the micro, small and medium enterprises (MSMEs) on Tuesday, he said the MSME sector was hamstrung by the attitude of the banks in lending to them.

These units did not enjoy the advantage of the larger industries in raising funds at competitive rates.

Interest rates impact

The small and micro units were hit by the high interest rate charged by the financial institutions and their reluctance to provide timely credit to these institutions prevented them from purchasing raw materials when they required them.

He said the SSI units ‘felt they were caught in a trap’.

Raw materials prices

He said the wild swing in the price of raw materials was another factor that eroded the profitability of MSMEs.

He said that at the meeting, representatives of MSMEs from different states expressed their views on the problems confronting this sector and there was a common perception about the reasons for the slowdown and how they could be helped to tide over the present crisis.

Mr Gandhikumar said the meeting was attended by officials from the Commerce and Industry Ministry and by the NMCC Member Secretary, Mr V. Govindarajan.

Consolidated report

He said the participating associations were assured that their views would be considered by NMCC which would also hold a similar exercise with the associations representing larger industries shortly and a consolidated report would be submitted to the Prime Minister for a decision.

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