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Dice loaded against MSMEs in Northeast

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  31 Jan 2016 12:00 AM GMT

No support for small industry sector from banks, government

By Our Staff Reporter

Guwahati, Jan 30: If the Northeast region is to develop a thriving, credible industrial scene, its micro, small and medium enterprises (MSMEs) need all support and incentives they can. Sadly, neither the banking sector nor the government is contributing to the growth of MSMEs in the region.

The banks in the region have been very "sluggish" in assisting revival and growth of MSMEs.

Industry sources said most MSMEs are sanctioned loans on the strength of their collaterals. "This takes away the banker's role of looking into corrective measures to instill viability in a unit in case any stress happens. Banks would rather be happy to pressurize the borrower with threat of liquidation of his persol securities rather than looking at options to aid the unit back to health," sources rued.

The industry associations have received several feedbacks from individual borrowers about such instances, which have been shared with the RBI and the MSME ministry.

The Federation of Industry & Commerce of North Eastern Region has sought a banking policy to address the issue in right perspective. The industry body has also submitted a memorandum to the Northeast MPs Forum stating its concerns. While the banking woes remain, the MSMEs have also not received much encouragement from State government departments and public sector undertakings (PSUs) which ought to procure a certain section of goods from these small units.

According to guidelines, the government departments and PSUs ought to buy 20 per cent of their annual value of goods and services from micro and small enterprises.

However, many government departments have been floating tenders with a condition that the participating units must have annual turnovers to the tune of over Rs 200 crore, even if the project requirement is a mere Rs 50-60 crore.

As a result of this condition, such tenders are being cornered by big players from other parts of the region and the country, depriving local MSMEs.

"If this system persists, the MSME units of the region will be relegated to the fringe and would be uble to take advantage of the privileges that has been enshrined in government ectments," the FINER added.

There are around 10.64 lakh MSMEs in the region, the bulk of these being in Assam.

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