From Our Special Correspondent
Daijiworld Media Network

Bengaluru, Dec 3: Karnataka Small Scale Industries Association (KASSIA) has demanded loans to the Micro, Small and Medium Enterprises (MSMEs) at 4% rate of interest and increase in subsidized funding
to Rs 5 crore.

Addressing a news conference in Bengaluru on Monday, KASSIA president Basavaraj S Jawali and Southern MSME Summit 2018 vice-chairman APK Reddy, said that recent power and water tariff hike have caused havoc to the development of MSMEs in the State.

They said despite the Central government’s support, Micro, Small and Medium Enterprises (MSMEs) were facing several challenges and surviving with many difficulties, such as frequent changes in water, electricity and land allotment policies.

Moreover, the input costs over which nobody has control in the unregulated market economy and prices of inputs have gone up manifold, making large number small and medium industries totally unviable in the current globalized market, they said.

KASSIA office-bearers have also demanded loans special incentives to MSMEs for reducing the mortality rate in the early phase and help them to establish and sustain in the market.

Noting that MSMEs form the bedrock of the Indian economy and second priority sector next to agriculture, they said their contribution to the economy is critical in terms of creation of employment and distribution of incomes to the most vulnerable sections of society.

On the macro front they contribute 40% to manufacturing and 45% to exports. MSMEs create more jobs per unit of investment as compared to large enterprises.

The MSMEs play an extremely important role by providing employment to unskilled and semi-skilled persons who would otherwise remain unemployed and may add to the social problems.

“However, MSMEs have been undergoing severe hardships in recent years which is turning out to be an existential crisis for them in the current global market scenario,’’ they said.

In this background, the leading southern MSME Associations, including Maharashtra and Goa have joined hands to raise the various issues and problems facing this sector with the Government of India seeking suitable redress to the various problems, the KASSIA president said.

Other demands of MSME are: The rate of interest charged to the SME borrowers should be on par with the interest charged on agricultural loans; do away with the cumbersome procedures and delays in sanction of loans; remove processing fee for annual renewals of SME borrowers; quick and online processing of loan applications in a time bound manner; mandatory display of financial products targeted at MSMEs in all banks; appointment of Ombudsman by the RBI exclusively for MSMEs.

They also demanded that the mandatory display of CGTMSE information including status by the banks; upfront guarantee fee must be reduced to 0.5%, so also annual service fee; revival of CLCSS quickly to benefit technology up gradation; withdrawal of present NPA norms and make it 180 days for SME borrowers with a holiday/moratorium of 2 years for new units.

The Government should withdraw the SARFAESI ACT or at least exempt the units up to a borrowing limit of Rs. 2 crore as this will help the micro and small industries to survive in the face of grave crises; purchase preference of 25% for MSMEs by the PSUs must be strictly implemented; and remove GST on labour charges, they said.