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Special SLBC meeting to address MSME issues on Oct-29

Hyderabad, Oct 28 (KNN)  With a view to addressing concerns facing the small and medium industry, particularly with regard to power outages and the effect on their cash flow, a  State Level Bankers committee (SLBC) meeting will be held here tomorrow.  

Having written to the concerned officials, SLBC Convenor and General Manager, Andhra Bank C Doraswamy told KNN that they would meet with officials from industry, energy department, Reserve Bank of India and other bank authorities.

The situation among small and medium units had reached a crisis like situation over the past four years owing to power outages and other nagging problems; pushing scores of small and medium enterprises (SMEs) on to the brink of collapse.  To address this, the Federation of Small and Medium Enterprises of Andhra Pradesh (FSMEAP) had urged the State government and the RBI to come to the rescue of the crucial sector.

“More and more SMEs are falling prey to financial problems arising out of power cuts and other problems.  This sector which employs over 40 lakh people across the State will be in doldrums if the government doesn't come to their rescue,” warned President, FSME-AP, A P K Reddy in a statement.

Referring to an RBI report, Reddy said that nearly 72 units had been turning sick every day during the last year.

“Already over 6,500 units have been categorized as sick units by the banks.  Power cuts are the main culprit for the dire straits that the MSME sector is in today, though there are other problems as well,” he explained.

Underlining the need for re-scheduling of NPAs, Reddy said the total non-performing assets (NPAs) in the MSME sector which stood at Rs 2,589 crore in March 2013, rose to Rs 3,025 crore in June 2013, recording an increase of 16.84 per cent, as per RBI data.

In this context, over the past four years, the Federation has been requesting the RBI, AP government and State Level Bankers’ Committee (SLBC) to come to the rescue of the sector, but to no avail, he said.

He found it ironic that the government was inviting more and more investments into the State when the existing units were deprived of uninterrupted power.

“After setting up industries, AP Transco is pressurizing the companies to use only 60 per cent of the power sanctioned.  In addition, if the power usage goes over the slab, AP Transco is penalizing the units by over five times of the standard charges,” he explained.