Government should treat small units on a par with corporates

The Hindu

If the government wanted only efficient industrial units to survive, micro, small and medium enterprises (MSMEs) and large industries should be treated equally, Tamil Nadu Small and Tiny Industries Association (TANSTIA) vice-president KR. Gnanasambandan said here on Thursday.

When falling behind loan repayment schedules, small units incurred the wrath of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act and its stringent provisions. However, when large corporates get into debt problems, they were being given the option of converting debt into equity. Such a situation existed despite small industries being hailed as the engines of economic growth.

Mr. Gnanasambandan was addressing a ‘Stakeholder meet on MSMEs under India MSME Darshan 2011' organised by Madurai District Tiny and Small Scale Industries Association (MADITSSIA) and Institute of Small Enterprises and Development (ISED), Kochi, in association with Federal Bank and Export Credit Guarantee Corporation of India (ECGC). ‘India MSME Report 2011,' prepared by the ISED, was released at the meeting.

Tamil Nadu was home to the highest number of registered MSMEs, largest employment per unit and highest investment per unit. However, it was also the State with the highest number of sick units and its output 

lagged well behind the national average, he said.

Speaking earlier, S. Maruthappan, General Manager of District Industries Centre, said that the State government was planning to train educated youth in entrepreneurship to prevent their migration from villages to cities.

S. Mohan, Assistant General Manager, State Bank of India (SBI), Zonal Office, said that the bank was designating several branches as ‘MSME branches' to facilitate smooth credit flow.

P.M. Mathew, ISED Director, said that in the U.S., a government department prepared such reports on small industries while in the U.K., the Bank of England prepared it, and by the private sector in the European Union.

MADITSSIA president V. S. Manimaran said that MSMEs faced numerous hurdles, power crisis and high interest rates being the primary factors causing concern. R. Jayaraman, former Madurai Kamaraj University professor, said that MSMEs were facing a shortage of skilled workers. K.S. Serma Pandiyan, MADITSSIA secretary, spoke.