Finance Minister holds pre-Budget meeting with MSME representatives

The meeting was called to discuss and understand the concerns, challenges of the MSMEs

Representatives of Micro, Small and Medium Enterprises (MSME) in Tamil Nadu, who felt the Union Budget did little to solve their problems, are now looking forward to the State Budget, which will be presented next month. On Monday, representatives from various industrial estates, MSME associations and chambers of commerce, attended a meeting called by the government to understand the needs, concerns and challenges of the MSMEs. The discussion was held in the presence of Finance Minister Palanivel Thiaga Rajan, Industries Minister Thangam Thennarasu and Minister for Rural Industries T.M. Anbarasan.

The Madras Chamber of Commerce & Industry (MCCI) has suggested assistance in funding to MSMEs through innovative methods like credit enhancement and credit guarantees. The chamber, in its recommendations, said the State could create an entity to provide the first loss default guarantee (mainly for SMEs in terms of credit innovation) up to a certain extent and the banks can lend to MSMEs based on the same as their risk would come down.

The chamber also said all government departments and PSUs should be mandated to register on the TReDS platform, where bills of MSMEs can be discounted. The MCCI representatives highlighted that the stamp duty for conveyance is 7% and registration fee is at 4%, totalling to 11%, which is among the highest in the country. Generally, in many States, the stamp duty is around 5% and the registration ranges from 1-3%. Tamil Nadu also could consider in these lines, the chamber said.

K.E. Raghunathan, convener of the Consortium of Indian Associations, suggested the establishment of a fair price centre in every industrial estate by SIDCO, in partnership with NSIC, collect monthly needs from MSME unit holders, procure in bulk from manufacturers directly and distribute to them at one price for six months in smaller quantities– with a credit of 30 days, under arrangement with the TIIC, to registered units situated in the government industrial estate. He added that the Budget should provide support to those units which are not coming under the eligibility of the Emergency Credit Line Guarantee (ECGLS) scheme.

On behalf of the Tamil Nadu Small and Tiny Industries Association its President K. Mariappan said 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 crisis. “NPA limitation period should be increased to 180 days. Alternatively, only in respect of wilful defaulters and the cases that are beyond repair, action under SARFAESI may be taken,” he said.