The Micro, Small and Medium Enterprises (MSME) sector has given a neutral rating for the goodies rolled out for them in the Budget. Deputy Chief Minister and Finance Minister, O. Panneerselvam, during his Budget speech, said, “The Tamil Nadu Transparency in Tenders Act will be suitably amended to make 25% purchase preference to MSMEs mandatory in the procurement by government and State public sector undertakings.”
The Finance Minister also announced that for constructing MSME units, plot coverage will be increased uniformly to 75% across the State and the Floor Space Index (FSI) will be appropriately increased to facilitate optimum use of the allotted space. He added, “SIDCO will construct multi-storey worksheds for micro units at a cost of ₹30 crore at the Ambattur Industrial Estate. In necessary places, workers’ hostels will be constructed by SIDCO to provide accommodation at affordable cost to MSME workers; they will be run on PPP mode.” The single window portal for large industries is now being customised for MSMEs, and will be launched shortly.
G.K. Basha, senior vice president, Industrial Estate Manufacturers Association, welcomed the announcements. But he was disappointed that no steps were taken for the rehabilitation of the sick and closed units. Most of the MSME associations echoed the same.
Several issues
“The industry has been facing several other issues which requires the Centre’s attentions. These are minuscule offers that really don’t matter,” said an industrialist who runs a micro unit in Guindy.
The Madras Chamber of Commerce and Industry (MCCI), one of the oldest Chambers of Commerce in India, said that there wasgood news for the MSMEs but capacity-building and ensuring ease of doing business were more critical. “The Chamber is already carrying out a study on the health of industrial estates in Tamil Nadu and more suggestions regarding the promotion of new estates will be shared by us with the Government,” it said.
The Tamil Nadu Association of Cottage and Tiny Entrepreneurs welcomed the government’s decision on setting of flatted construction (workshops) for micro industries at Ambattur industrial estate. Its president, A.S.Kannan, said that it was a long pending request that was acknowledged.
The MSME sector in the state has faced several challenges in the last three years - a flood that ruined more than 14,000 units (in 2015) causing losses to the tune of Rs 11.8 lakh, a cyclone (in 2016) shattered many small units working out of sheds and, more recently, demonetisation and GST which hampered their businesses.
There are 17.20 lakh registered Micro, Small and Medium Enterprises (MSME) units in Tamil Nadu. During the Global Investors Meet held in 2015, 10,073 Memoranda of Understanding (MoU) were signed with investors to start MSME units with an investment of Rs.16,533 crore.
