Micro, Small and Medium Enterprises (MSME) associations in South India have come together to demand relief from the Centre.

“MSMEs have been undergoing severe hardship in recent years, which is turning out to be an existential crisis for us in the current global market scenario,” said Basavaraj Javali, Chairman of Southern MSME Committee and President of Kassia.

MSME concerns

“A few amendments being proposed in the MSME Act are also detrimental to our existence,” he added.

In this background, the leading southern MSME associations, including Maharashtra and Goa, have joined hands to raise the various issues and problems facing the sector with the Centre seeking redress.

The associations that have come under the common umbrella are Karnataka Small Scale Industries Association (Kassia), Federation of Small & Medium Enterprises of India (FSMEI), Federation of Andhra Pradesh Small & Medium Industries Association (FAPSMEA), Kerala State Small Industries Association (KSSIA), Tamil Nadu Small and Tiny Industries Association (TNSTIA), Coimbatore District Small Scale Industries Association (CDSSIA), Goa State Industries Association (GSIA) and Chamber of Small Industry Associations, Maharashtra.

Preliminary meeting

“We met today in Bengaluru at a preliminary meeting to discuss in detail the issues to be taken up with the government in the forthcoming summit scheduled to be held in January or February,” said Javali.

“We play an extremely important role by providing employment to unskilled and semi-skilled persons who would otherwise remain unemployed and may add to the social problems,” he added. The committee flagged many issues at today’s meet.

“We are urging the Central government to drop the proposal for redefining the MSMEs using the turnover criteria and to maintain status quo,” said V Gnanasekaran, President of Coimbatore District Small Scale Industries Association.

Explaining the rate of loan interest charged on SME borrowers, A Padmanabha, co-ordinator of the southern committee, said, “It should be on par with the interest charged on agricultural loans. Banks should do away with the cumbersome procedures and delays in sanction of loans, do away with the processing fee for annual renewals of SME borrowers and quick and online processing of loan applications in a time-bound manner.”

Other demands

Other issues that figure prominently in the charter of demands are: mandatory display of CGTMSE information, including status by the banks. Upfront guarantee fee must be reduced to 0.5 per cent, so also annual service fee.

Revival of CLCSS to benefit technology upgradation, withdrawal of present NPA norms, making it 180 days for SME borrowers with a holiday/moratorium of two years for new units, are the other demands.

The government should withdraw the SARFAESI Act or at least exempt the units up to a borrowing limit of ₹2 crore as this will help the micro and small industries to survive in the face of grave crises. Purchase preference of 25 per cent for SMEs by the PSUs should be strictly implemented, it said.

Payment due from medium and large industries and PSUs must be cleared within 45 days as per the provisions of the MSMED Act 2006 to help SMEs to stay away from legal entanglements. Eliminate red tape and create a common regulatory body for SMEs. Create an exclusive category for SMEs in order to bring in better focus on the problems and remove GST on labour charges.