Coimbatore has a greater number MSME industries, employing several thousands of people. Right now these Micro, Small and Medium level industries are not functioning in the district due to the lockdown to curb covid-19 infection. Approximately for the past two months, they have shut their operations down. But even during these non-functioning times, MSMEs are still paying their loan-interests, while also taking care of their employees.
Tamil Nadu Chief Minister M.K.Stalin wrote to the Central Government on Tuesday, and requested it to provide a moratorium on repayment of loans that the MSMEs have taken for at least the first two quarters of 2021-2022.
At the same time, he also asked Chief Ministers of 12 States (AP, Bihar, Chhattisgarh, Delhi, Jharkhand, Kerala, Maharashtra, Odisha, Punjab, Rajasthan, Telangana and West Bengal) to ask for the same.
Talking about the condition in Coimbatore, C.Balasubramanian, President, India Chamber of Commerce and Industry, Coimbatore said “Small scale business runners here are finding it very difficult to pay labours’ salary, EB Charges and other expenses during these times. There is a definite need for granting a moratorium on loan repayment by the Central Government now.”
Banks should support MSMEs:
“The Centre should give direction and not just guidelines to Banks in this matter. Since the Govt has only given guidelines, the decisions to give relief/exemptions and additional loans are in the hands of Banks’ Branch Managers.”
“Mostly, the bank managers decide to give financial support to clients who have given high-security, make profits and has good performance records. Today, small business runners who in a crisis are in need of support from banks for their survival but they are being denied on many occasions.”
Moratorium needed till March 2022:
“Moratorium is needed for the entire financial-year (till 31.3.2022). To survive this unprecedented situation, MSMEs need interest-free loan , additional capital and concessions in other areas. Only if these are provided, industries can run or else they will face serious crisis. Coimbatore based industrial associations have already made representations to the Central Government regarding this.”
See CM’s appeal as welfare-driven, not political:
When asked what does he think of Tamil Nadu Chief Minister M.K.Stalin’s letter to 12 Chief Ministers to press the Central Government for a moratorium on loan repayment for MSMEs and Small businesses, he said “ we need to see our Chief Minister’s initiative on a welfare-based perspective and not in any political-angle. The relief is needed for industries during this lockdown, and a State’s CM is asking for his State’s welfare.”
“Rather than just a CM from a single State making it as a request, when 12 Chief Ministers press the Central Government, it will certainly have a good impact. The request from CM Stalin to his fellow CMs is much needed and right. We will also be requesting the Centre to provide a moratorium”
GDP will have an impact:
Small businesses can restart only if a relief is provided at the earliest. A stimulus package should be given to MSME sector because they have suffered much due to the second wave of pandemic. Next to Agriculture, MSMEs contribute the highest percent of employment in India. 30% of our GDP generates from MSMEs. This sector contributes to 12 crore direct employment & 24 crore indirect employment in our country. 40 % of exports are done by them, and if the sector continues to be financial under pressure, it will have a direct impact on GDP. So, the Centre should assist MSMEs in this period of crisis, the President added.