The All India Manufacturers’ Organisation (AIMO) has appealed to the government to give at least three months’ time before implementing changes on policy matters with respect to statutory levies or regulations.

“It should not be sudden and should be done in due consultation with the industry,” KE Raghunathan, President, AIMO, said.

Study on demonetisation

Sharing the findings of a study on the impact of demonetisation on micro, small, medium and large enterprises across the country, the AIMO, while hailing the Prime Minister's “bold” move, said, “We stood by you, we now need you badly,” highlighting the plight of the manufacturing industry.

The industry’s immediate demands include removal of all limitations on cash withdrawals from banks, increasing income tax limit up to ₹5 lakh to trigger consumer spend, putting a stop on the reported harassment by revenue enforcing authorities on business entities, refraining from thrusting sudden changes – be it policy matters or other announcements and ushering in cyber security for eWallets.

“Lack of adequate finance has hit the MSME sector badly. The Prime Minister had announced on the last day of the previous calender year that all SMEs would get up to ₹2 crore under credit security scheme (collateral-free loan),” Raghunathan said, citing the study finding that banks were not giving loans of even ₹1 crore to SMEs without collaterals at present.

“Our informal enquiry with the Debt Recovery Tribunal (DRT) showed that 52 per cent of the pending cases under SARFEASI (below ₹1 crore) were secured against properties. Banks also admitted that they were taking security for even smaller loans. If the PM’s announcement is to be implemented, then all banks must be directed to immediately return the securities collected from the MSMEs for loans already given up to ₹2 crore,” AIMO president said.

Related Topics