Hyderabad: With lockdown threatening the existence of micro, small and medium enterprises (MSMEs), touted as the backbone of the economy, Telangana’s estimated 2.3 million MSMEs, barring those in essential sector like healthcare and food processing, are staring at dire straits.
Zero production in past five weeks but all overhead costs have to be borne and salaries paid as per government directives. “Lockdown 1.0 made it difficult for MSMEs to survive and version 2.0 has sounded their death knell. If this continues, 30-40% MSMEs will not reopen,” said Srinivas Garimella, chairman-industrial development committee, FTCCI. Garimella said MSMEs operate on very meagre resources and measures like social distancing and sanitisation will put further strain on liquidity and productivity. “Productivity will shrink and maintenance costs will shoot up, hitting liquidity, which is fuel for MSMEs. Nearly 5-6 months will be a washout,” he said, urging the Centre to announce a Rs 5-6 lakh crore MSME relief package.
CII Telangana MSME convenor AVS Reddy said the key to survival is access to affordable finance. “Many MSMEs don’t get loans from banks and those who do, have to pay 11-12% interest as against 5-6% abroad,” he said, adding that MSMEs are also staring at issues pertaining to transportation and raw material availability.
Prabhu Raj, GM (south zone), National Small Industries Corporation (NSIC), Union MSME ministry, said: “Around 40-50% micro and small units will face major problems as they have lost income but have to meet statutory obligations. We held discussions with industry and made several recommendations. We are also trying to help MSMEs procure raw material from bulk manufacturers and sell finished goods to government and private players.”
The recommendations include payment of 50% salaries of employees from ESI funds and interest free loans equivalent to six months working capital requirements. Industries principal secretary Jayesh Ranjan said while the Centre is expected to announce a major relief package soon,
Zero production in past five weeks but all overhead costs have to be borne and salaries paid as per government directives. “Lockdown 1.0 made it difficult for MSMEs to survive and version 2.0 has sounded their death knell. If this continues, 30-40% MSMEs will not reopen,” said Srinivas Garimella, chairman-industrial development committee, FTCCI. Garimella said MSMEs operate on very meagre resources and measures like social distancing and sanitisation will put further strain on liquidity and productivity. “Productivity will shrink and maintenance costs will shoot up, hitting liquidity, which is fuel for MSMEs. Nearly 5-6 months will be a washout,” he said, urging the Centre to announce a Rs 5-6 lakh crore MSME relief package.
CII Telangana MSME convenor AVS Reddy said the key to survival is access to affordable finance. “Many MSMEs don’t get loans from banks and those who do, have to pay 11-12% interest as against 5-6% abroad,” he said, adding that MSMEs are also staring at issues pertaining to transportation and raw material availability.
Prabhu Raj, GM (south zone), National Small Industries Corporation (NSIC), Union MSME ministry, said: “Around 40-50% micro and small units will face major problems as they have lost income but have to meet statutory obligations. We held discussions with industry and made several recommendations. We are also trying to help MSMEs procure raw material from bulk manufacturers and sell finished goods to government and private players.”
The recommendations include payment of 50% salaries of employees from ESI funds and interest free loans equivalent to six months working capital requirements. Industries principal secretary Jayesh Ranjan said while the Centre is expected to announce a major relief package soon,
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