Kassia seeks additional grants for KSFC to bail out distressed SMEs

The Karnataka Small Scale Industries Association (Kassia) has urged Chief Minister BS Yediyurappa, who also holds the portfolio of finance, to provide additional grants to the Karnataka State Finance Corporation (KSFC).

Participating in a pre-Budget meeting called by the Chief Minister, of industry associations and chambers of commerce, R Raju, President, Kassia, said KSFC needs to be strengthened with more grants.

“There is a need to allocate additional funds to KSFC to meet the subsidy component on the loan it has advanced to the SME sector. This will strengthen the financials of KSFC to extend additional loans.”

“The highly subsidised rate of 4 per cent interest on loans to micro and SSI units by KSFC has been very helpful for industries in the SME sector. This needs to be further augmented and supported by the State government to help SMEs come out of the difficult situation they face now and encourage them to invest and expand operations in the State,” stated Raju.

Raju further said, “Towards this end, we request the Government to allocate a ₹300 crore to meet the subsidy gap towards these loans by KSFC, including accrued amounts.”

Problem areas highlighted

Kassia further highlighted various issues concerning the development of MSMEs — such as industrial infrastructure in general as well as in the industrial estates, including private industrial estates, streamlining procedures for allotment of KSSIDC/KIADB land to MSMEs, including the need for private sector involvement in developing new industrial areas, creation of new industrial townships, and a number of other issues.

The small-scale industries association also stressed the importance of the Micro and Small Enterprise Facilitation Council (MSEFC) in settling delayed payment cases, requesting the government to open two more centres in a northern district and also Mangaluru.

The need for good maintenance of infrastructure in the industrial estates of KSSIDC and KIADB was also stressed at the meeting. Irritants like levy of property tax by the local authorities where clear guidelines were absent was highlighted, so also the need to augment power infrastructure in the State, particularly for industry, and to ensure that the tariffs were not unnecessarily raised every year as consumption by industry has come down steeply in recent years.

KASSIA particularly pleaded for the creation of the right ecosystem for increased investments.

The chief minister is said to have appreciated the points raised and responded positively to the memorandum. Kassia hopes that some of these issues will be sorted out in the forthcoming Budget to ensure greater investment from the SME sector.