Kaushik Patel
State revenue minister Kaushik Patel on Saturday said that a lack of timely access to working capital may be one of the reasons behind the “weakness” of MSMEs. Addressing an MSME seminar “Banking Finance Meet 2018” organised by Gujarat State Small Industries Federation (GSSIF), Patel said, “Despite so many government policies and facilities provided, we keep on hearing that the MSMEs in Gujarat are on their death bed. We have to find out the reasons.”
He said, “A lot of industries are suffering due to gaps in accessing working capital. The second reason is that what ever the MSMEs earn, they tend to spend a large portion of it…It is our experience that they tend to change their lifestyles, indulge in buying bungalows and cars from the money that should be utilised in furthering their business. They should not do this.”
Out of the 3.5 lakh MSMEs, there were a total of 42,579 “sick” MSME units in Gujarat in 2016, forming the third highest quantum of sick units after Uttar Pradesh and Maharashtra. The number of sick MSME units has been on the rise since 2013, when it stood at 20,452. In 2014, the number rose to 48,000 units, before peaking at 49,003 units in 2015. The revenue minister said that despite bankers, officials and government policies being “positive”, there were some gaps that needed to be bridged to help MSMEs in the state.
“The government is open to any changes that need to be brought about in the policies governing MSMEs. But the entrepreneurs should also think why we are getting weak,” the minister said.
The president of GSSIF, Atul Kapasi, said that though the governments have laid out favourable policies for improving the financial health of MSMEs, the implementation at the “branch-level” of banks is poor. “We do not encounter a friendly atmosphere, when we go the banks,” Kapasi said, adding that banks needed to lessen the “paper-work” and make it “hassle-free” for the small entrepreneurs.