Bengaluru, Oct 5 (KNN) Karnataka small industries have approached the Finance Ministry seeking interest subvention for loans and other measures to provide relief to afflicted business units.
In a memorandum to the Union Minister of Finance P Chidambaram, the Karnataka Small Scale Industries Association (KASSIA) has asked for 2 per cent interest subvention for the loans through finance institutions for a period of one year; and a factoring scheme to fund State and Central Public Sector Units to clear payments pending beyond 6 months for supplies made.
It has also requested that the government release 20 per cent extra loan for all borrowers without further formalities and also restructure NPA loan cases for a further period of 6 months.
KASSIA has asked the government to set up a high power Task Force, to take note of the multifarious problematic issues and evolve remedial measures on war footing to restore the stamina and momentum of the MSME Sector.
“Today the sector is exposed to a multitude of problems in every facet – infrastructure inadequacy, input deficiency and prohibitive costs, acute shortage of skilled and unskilled persons, totally inadequate credit, prohibitive interest rate, poor connectivity and logistic support and hostile marketing environment and above all policy implementation deficiency,” KASSIA said.
Before the situation worsens remedial actions are to be taken to avoid the worst, without further loss of time, it said.
The MSME Sector is made up of about 8000 items and more than 85 categories of items spread out in all States. It contributes to about 40 per cent of the manufacturing output, 40 per cent of employment next only to agriculture and about 43 per cent of the country’s total exports.
Significantly, it has supported agriculture, large industries, rural development, export, wide spread entrepreneurship, import substitution, rehabilitation of the technical unemployed and retired defence workforce, widened the economic benefits, participating in globalization and above all contributing to the economic stability of the nation.