MSMEs seek loans at lower rates

Micro and Small and Medium Enterprises (MSMEs) have sought a slew of fiscal support and policy measures from the Union Government for the growth of the sector.

The National Confederation of Small Industry and the Industrial Estate Manufacturer’s Association in a representation to the Prime Minister Narendra Modi, have sought relief from the provisions of the Sarfaesi Act which is used to auction assets of industrial units to recover over-due loans. Large industries and the corporate sector are extended facilities such as Corporate Debt Restructuring but the MSME sector bears the brunt of the harsh measures, they said.

The 90-day limit to declare an over due loan as a non-performing asset should be doubled to 180 days, they said. Rehabilitation of sick units should be supported on a priority basis, they said in the representation.

Their demands included: MSMEs should be treated on par with large and small industries, central excise duty exemption limit be hiked from the present ₹1.5 crore, credit to the MSME sector should be available at 7-8 per cent interest rates, public sector units and government departments should be told to procure material from local MSME units.

The Association has urged that Small Industries Development Bank of India should be allowed to lend directly to units rather than through banks. If it cannot lend directly to MSMEs, as was originally envisaged, it should be merged with the IDBI bank.

They also said that the National Small Industries Corporation should be directed to extend loans for factory sheds and machinery, MSME Development Institute should be strengthened to guide entrepreneurs in export business, and labour laws suitable for the sector must be framed. Delayed Payment Act should be enforced to ensure large corporate units do not delay payments to MSME units, they said. MSMEs also demanded that the government should act on the recommendations of the Inter Ministerial Committees on accelerating growth of MSMEs.