Over 20,000 micro, small and medium enterprises in Tamil Nadu hit by floods earlier this month will need government financial assistance to get back on their feet.

According to the Industrial Estate Manufacturers Association, Guindy, micro and small enterprises need financial assistance of at least ₹ 2 lakh a unit – half as subsidy and the balance as interest free loan repayable after the units revive.

Addressing media persons, Shanmuga Velayudham, Advisor to the Association, said the assistance is needed as they have to start from scratch. It could be funded through the relief package from the Centre.

The Association estimates the loss of production across all the flood-affected areas at about ₹ 7,000-10,000 crore with over 2 lakh workers displaced. The units need ₹ 2,000 crore for repair and replacement of machinery and about ₹ 2,500 crore for raw materials, tooling, software and interiors.

The Government will also have to rework some of the existing assistance schemes. For instance, the back-ended capital subsidy of 25 per cent for micro industries could be given as an advance to leverage 75 per cent bank loan. Taxes and duties should be deferred by 5 years. These will not cause additional outgo for the State government and the Centre, he said. 

The floods in the first week of December inundated Chennai, Thiruvallur, Kancheepuram and Cuddalore causing huge losses of life and property.

More than half the industrial enterprises in the MSME sector are concentrated in the flood affected areas. The industrial hub on the outskirts of Chennai was submerged when the Adyar River overflowed. Costly machines have been irreparably damaged according to the Association which represents over 2,000 units in Guindy and Ekkatuthangal

comment COMMENT NOW