Acknowledging the challenges faced by the Micro, Small and Medium Enterprises (MSMEs) — the backbone for other industries — Tamil Nadu Minister for MSMEs and Rural Industries T.M. Anbarasan in an interview says the government is taking steps to address the needs of the sector. Excerpts:
Since 2015, the sector is bleeding with one crisis after another — the Chennai floods, Cyclone Vardah, demonetisation, the GST roll-out and now the COVID-19 pandemic. What has the DMK government done to help the sector?
Indeed, we are aware of the challenges faced by the sector. After the DMK took over we held discussions with industrialists. During the COVID-19 lockdown, we ensured there was no disruption to the MSMEs and to help them sustain production, 60% of the capital subsidy was released in a single instalment in June 2021. Around ₹221.72 crore has been disbursed to 2,426 MSMEs. We also set up an expert committee, headed by N. Sundaradevan, to study the challenges of these units. The committee is in the final stages of preparing the report. You will see a lot of new announcements over the next few months.
Could you elaborate on the proposed initiatives?
We will strengthen the single window system, introduced during Kalaignar’s [M. Karunanidhi’s] rule, for easing clearance and approval. We are developing a comprehensive, electronic, real-time database, which will help these units to avail themselves of government support. A Tamil Nadu Credit Guarantee Scheme will be made operational soon. As announced in the Budget, TAICO bank is being repurposed to help MSMEs. The department is working on the country’s first end-to-end fully online platform for credit rating and financing of MSMEs. The database will be in place in the next 90 days.
MSMEs complain that banks are reluctant to lend them and are pressuring them to clear outstanding loans for new loans to be sanctioned…
Banks are reluctant to lend as the non-performing assets (NPAs) are high. But the State government has come out with schemes like the Credit Guarantee scheme that is focused on encouraging the financial institutions to lend a lot more to MSMEs. Also 90% of the units in this sector are micro enterprises that require a working capital of less than ₹40 lakh. The government has decided to guarantee loans up to ₹40 lakh for the pandemic-affected units. The guarantee will be up to 90%. This will definitely encourage banks and non-banking financial companies to overcome their reluctance to lend to this sector.
What has the State done to address the issue of spiralling price of raw materials?
Yes, raw material costs have been a concern. We took it up with the Union government and urged it to roll back the prices to the pre-April 2020 levels. The Industries Secretary also held a meeting with the manufacturers of certain raw materials.
There are many unsold industrial plots across industrial estates. How will you put them to better use?
As on March 31, 2021, around 1,341 plots were unsold due to the high cost. To reduce the capital investment of MSMEs and put these plots to a better use, TANSIDCO reduced the cost of plots in 32 industrial estates. After the price was reduced, 414 applications have come in online and selection is under way.
Are there plans to increase the number of SIDCO industrial estates?
TANSIDCO is maintaining 122 industrial estates. Eleven new estates will come up on 1,093 acres in eight districts at an investment of ₹318 crore.
Infrastructure at some of the oldest estates seems to be a big concern and during the recent rain, many estates were flooded and water seeped into the factories damaging machines. What is the government doing to upgrade the infrastructure?
We are upgrading around 80 industrial estates that are very old and 21 of them have been upgraded at a cost of ₹67 crore. We have proposed to take up one-time infrastructure upgrade of other estates with the assistance from the government and industrial associations, and their maintenance will be handed over to the industrial associations. During the recent rain, ₹36 lakh was spent by TANSIDCO on the removal of stagnant rainwater from the estates and other work.
How many MSMEs have closed in recent years?
We don’t have exact data because registration is voluntary.
Could you share details of how many MSMEs have been affected by the closure of the Ford car plant?
Over 200 MSMEs and about 75 large industries were supplying parts to the company. And these firms are supplying parts to other automobile units in Tamil Nadu and nearby States. As the Ford Motor Company announced its closure plan in advance, the MSMEs had sufficient time to re-work their business plans. The State government will help MSMEs affected by the closure of the Ford plant.
What are the initiatives being taken by your Department to help women entrepreneurs?
We will assist women under the self-employment schemes. Women entrepreneurs will be given priority in the allotment of industrial plots. Exclusive women industrial parks were developed by TANSIDCO in five locations, covering 380 acres, and allotted to 1,100 women. This has generated more than 8,000 direct and indirect jobs.
You have recently inducted a CEO for TANSIM. What plans do you have for it?
We will be establishing Startup Hubs in Chennai and all major district headquarters. We will establish an investment aggregation platform announced by Chief Minister M.K. Stalin recently. The government will create a support system for intellectual property rights and other business management services to help early-stage entrepreneurs.
