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Codissia President R Ramamurthy termed the invitation from the Union Finance Minister’s office (for a dialogue to ascertain his views on the current economic issues), as “an honour” considering that he shared the platform with some of the top industry icons in the country.
“I was given to understand that Codissia was the only association from the South to receive the invite and we are truly honoured. Finance Minister Nirmala Sitharaman gave a patient hearing to our issues and has promised to revert in two weeks,” he told BusinessLine on his return.
Sharing details, Ramamurthy said “the industrial slowdown is visible. There’s been a sudden drop in production in the general engineering sector by 30 per cent and at least 50 to 60 per cent in the automobile sector. This is having a huge impact on the MSME units as the micro units depend on large corporates and medium-sized undertakings for orders.
“The deep slide in order flow coupled with inventory pile up is choking the MSMEs in particular. A good number of units are unable to repay their bank loans,” Ramamurthy said, adding “most of us have done away with overtime wages, which is the lifeline for a majority of workers.”
Funds, need of the hour
Besides highlighting the paradox that has befallen the MSMEs, the Codissia President said that he has appealed to Sitharaman “to create the environment to stimulate demand. Infusion and availability of more funds from banks is the need of the hour.”
“Banks should provide collateral-free assistance up to ₹3 crore, increase working capital sanction limit from 20 per cent to 40 per cent of the undertakings’ annual turnover to tide over the present imbroglio, increase the NPA norm from 90 days to 180 days and above all, come out with a Debt Service Coverage Ratio (DSCR) for MSMEs. At present, DSCR is on par with corporates; this is unjustifiable.”
Ramamurthy also revealed that when the issue of GST reduction on job order (from 18 per cent to 5 per cent) was sought, Sitharaman asked him to route the request through the State Finance Minister.
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