Tamil Nadu Assembly Elections | MSME sector flags infra issues

Industries in T.N. hit by labour shortage, power cuts and rising raw material costs.

If there is one sector that has been constantly suffering because of both the State and the Centre, it is the Micro, Small and Medium Enterprises (MSME) sector, say entrepreneurs and companies when asked about the issues they expect to be settled post-Assembly elections in Tamil Nadu.

As per the data provided in the recently launched MSME policy, the State has around 23.60 lakh registered enterprises providing employment opportunities to about 151.61 lakh people with a total investment of ₹2,73,241 crore.

“Since the 2015 [Chennai] floods, things have not worked well for the sector. [Machinery were marooned then.] Mounting losses and debts, non-availability of proper financial help from the government among others. GST was also a concern — but that has nothing to do with the State government,” said a veteran industrialist, wishing anonymity.

He also pointed out that in the 1980s and the 1990s the State’s MSME sector was flourishing and some of the oldest industrial estates in the country were born in Chennai and Tamil Nadu. “But today real estate developers have got into many industrial estates and are building apartments and other offices. The government is allowing this to happen instead of developing the industrial estates,” he added.

Poor roads

Representatives from most industrial estates spread across the State said infrastructure was something that had never been looked into and that should be the top priority of the government. When IT parks and SEZs can have fancy roads why not the roads leading to MSMEs, which are the backbone to several industries, they asked.

K.E. Raghunathan, convener of the Consortium of Indian Associations, said any support or solutions could be extended only if we have right statistics. “We failed miserably in creating valid data on number of existing MSMEs and also on employment of both formal and informal workers,” he said.

“Also, the State government should control or regulate or support Micro and Small Enterprises from huge raw material price increase in the last six months and also safeguard the interest of exporters using RoDTEP scheme, which is yet to formulate rates for this year,” Mr. Raghunathan said.

Power cuts

R.G. Chakrapani, secretary of the Tirumazhisai Industrial Estate, said that though the government claimed to be a power surplus State, there had been unscheduled power cuts and poor quality of power. He pointed out that there were no substations, no proper roads, no effective storm water drainage and adequate sewage treatment plants. Most MSME units in Coimbatore, Tiruchi and Madurai echoed the same views. Many even said that though there were tall claims being made on skilling and training, these had really not helped the sector in anyway. Even now there was a huge shortage of labour, which the government needed to seriously look into, they said.

M.V. Ramesh Babu, president of the Coimbatore District Small Industries Association, noted that though the government supports skill development initiatives, identifying candidates is a challenge. “The government should help the units get candidates for training,” he said.

“We look up to the State government for infrastructure, support to investment, electricity, etc.,” said an SME owner in Coimbatore, who did not want to be identified. The industries mainly look for conducive atmosphere to run business. However, he felt, most of the requirements have been taken care of by the present State government. If plan approvals and land conversion processes are simplified, the MSMEs will find it easier to operate, he said.

Delayed payments

Mr. Babu pointed out that another area of concern is getting early payments from government departments and public sector undertakings. Labour shortage is an issue for the MSMEs. Payments for orders catered to PSUs or government departments should be released to MSMEs within a month or 45 days, he said.

Smaller units in this sector said banks had never been considerate with them and most schemes announced by the Centre did not reach them — the State government should ensure that there was some solution on this front. Many units also said they would look at the manifestos of the parties and see if there is something that is being mentioned for MSMEs. ‘We don’t want to be taken for granted this time’, they said.

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