The Hindu Business Line : Small, medium units seek support package from Centre

Coimbatore, Aug. 25 The representatives of Micro, Small and Medium Enterprises (MSMEs) are meeting the Prime Minister, Dr Manmohan Singh, on Wednesday.

A whole range of issues, including monetary relief to SMEs, changes in tax rules, supply of raw materials at concessional prices and promoting the SME sector to foreign buyers by taking delegations of representatives from the sector to foreign countries, are expected to be highlighted at the meeting.

Speaking to Business Line on Tuesday, before leaving for Delhi , Mr D. Gandhikumar, President, Tamil Nadu Small and Tiny Industries Association (TANSTIA), said the significance of the meeting could be gauged from the fact that the Prime Minister will be listening to the views of the representatives of the MSME sector for the second time within a year. It was just before the stimulus package was fine tuned late last year that a similar exercise took place.

Mr Gandhikumar said the economic slowdown in the last one year had taken a toll on the MSMEs, and he estimated that nearly 70 per cent of the net worth of these companies had been eroded and he wanted a slew of monetary incentives to enable them to come out of the woods.

Mr Gandhikumar said the SMEs were given term loan by the Small Industries Development Bank of India (SIDBI) that had a repayment period ranging from three to seven years depending on factors such as the quantum of loan, cash approval concerned and the industries to which they belonged. He said the maximum loan term should be extended to 10 years.

Mr Gandhikumar said the textile industry has benefited immensely in upgrading technology from the Technology Upgradation Fund Scheme (TUF) offered to them by the Ministry of Textiles under which they get term loan at 5 per cent interest. TANSTIA insists that a similar scheme be formulated to extend term loans to micro and SSIs at 5 per cent interest rate.

Mr Gandhikumar said a major problem facing the MSMEs was the unprecedented increase in the prices of raw materials such as iron and steel, copper, aluminium, plastic, and so on. .