New move will stretch MSME funds thin: TANSTIA
TANSTIA President S Anburajan said that the available lending to MSMEs is inadequate compared to the demand.
The inclusion of retail and wholesale traders under Micro, Small, and Medium Enterprises (MSMEs) received flak in the State, with Tamil Nadu Small and Tiny Industries Association (TANSTIA) urging the Union government to reconsider its decision as it will impact the funding for MSMEs, which are facing cash crunch.
TANSTIA, which has a total of 180 MSME associations, including district, industrial estate associations and 1600 entrepreneurs as direct members and 1.5 lakh indirect members, said that decision is “prejudiced, destructive, and inapt” for micro small industries.
TANSTIA President S Anburajan said that the available lending to MSMEs is inadequate compared to the demand. “With the new provision of inclusion of retail and wholesale traders, the available funds would be divided and result in contraction of MSME funding. This will further put MSME into a deep crisis of cash crunch,” he added.
This comes after Union Minister Nitin Gadkari last Friday announced inclusion of retail and wholesale trade under MSMEs, as per which they will also now get the benefit of priority-sector lending under RBI guidelines.
“This new provision will narrow the prospects of the manufacturing sector, resulting in closure of micro and small manufacturing units,” Anburajan said. TANSTIA suggested that the retail and wholesale trade be separated and merged with the Commerce and Industries Ministry for specific promotional schemes and their implementation.
K V Kanakambaram, president of Industrial Estate Manufacturers Association, told Express that the Centre should allocate separate funds for retail and wholesale traders and they should not have a share in the funds allocated to MSMEs. “Already the sector is in doldrums,” he added.
What will happen
Inclusion of retail and wholesale trade under MSMEs will enable them to avail the benefit of priority-sector lending