Pics: Spoorthi Ullal

Daijiworld Media Network - Mangaluru (ANK)

Mangaluru, Oct 21: President of Karnataka small scale industries association (KASSIA) R Raju said, "Small and Medium Enterprises (SME) in the country are passing through an extremely challenging phase due to severe economic slowdown.”

Addressing media here on Monday, October 21, R Raju said, "The industrial growth measured in terms of index of industrial production is one of the lowest in the month of August in the last seven years. The SME's are in dire straits and this has been in the making for the last two years. Currently the severe slowdown in the automobile sector, textiles and garments and other manufacturing segments, including consumer durables has severely damaged the potential of the SME's to sustain.

"The micro and small enterprises in the state are badly hit by the recession and many units have seen a fall in business ranging from 30 to 70%. We acknowledge that the government has recently taken many measures which include direction to banks to go slow on recoveries, enforcement of NPA norms and also ease the flow of credit to micro and small enterprises.

"The SME's face major challenges in terms of access to finance, markets, good infrastructure, availability of trained man power and access to technology. The members of the KASSIA in the state and SME's in general face the same problems all the time. KASSIA has been raising these issues on every available platform to impress upon the government, the need to address these issues.

“Under these circumstances, we urge the government to address these issues by provision of incentives for up skilling, relaxation in GST collection, making it quarterly below certain slabs, reduction of GST rates, improvement in grievances redress mechanism of GST, improvement in credit flow to the SMEs, reduction of real interest rates, and also address key issues of the infrastructure deficit, both in terms of physical infrastructure and logistics.

"We request the Government to extend time for the repayment of interest due by SMEs for at least one year so that industries can continue to exist. The introduction of GST, though a very welcome and needed tax reform in the Country, seems to have created serious problems initially for SMEs in complying with the requirements. This has occurred due to the complex nature of the tax and many rates, compliance requirements in terms of filing returns and taking input credit and related issues.”

“The association requests the Government to raise the credit guarantee cover up to Rs five Crore for SMEs keeping in view the changing business needs and the need for adequate finance for operations. Banks also must be advised to implement the provisions under the CGTMSE as often they place impediments in the way of such coverage.

"The Prime Minister’s initiative of providing loans through the 59 minutes window online is found to be only on paper. It is found that it is impossible to access loans under this scheme as banks place hurdles after giving principle acceptance online. It should be mandated that Banks display on notice boards statistical information of loans disbursed under the scheme.

"Small Industry requires relaxation in terms of labour laws as it is the job creating sector and tends to be labour-intensive, employing socially backward sections. We would like the Government particularly to address these issues in consultation with industry including the minimum wages issue. Also, labour law compliance, returns, procedures and related issues need to be addressed and the red tape has to be eliminated at all levels. KASSIA urges central government to approve Small Factories Act which is pending before Parliament.

“We are informed by the Cashew Manufacturers in Mangaluru of the problem of non-acceptance of invoice price as per the Bill of Entry by the customs authorities in Mangaluru. Sizeable quantity of cashew kernels are imported by the manufacturers in Mangaluru as the local production is inadequate to meet the demand. Therefore the action of the custom authorities who reassess the value of these import upwards in 60 to 80% of such cases has become a big problem.

"Mangaluru, though, endowed with a major port, unfortunately lacks proper connectivity to the port, a problem that needs to be addressed in the interest of industries in the state and the entire region. Industries in Mangaluru also face difficulties in moving large containers freely to the port as the local road infrastructure connecting the port needs to be upgraded suitably. The infrastructure in the industrial areas needs to be maintained and kept up in good shape,” he said.

Vice president K B Arasappa, Joint secretary T M Vishwanath Reddy, Treasurer S M Hussain, KCCI president Isac Vas and others were present.