Ancillaries of BHEL in Tiruchi and nearby districts do not find any benefit from the latest notification by Reserve Bank of India extending validity of the Interest Subvention Scheme for MSMEs till March 31, 2021.
Interest relief of two % is extended to working capital or term loans to the extent of ₹ 1 crore under the subvention scheme, to eligible MSMEs. But the major impediment for the fabrication units in availing the scheme is the stipulation that loan accounts on the date of filing claim should not have been declared as NPA. The scheme clearly states that no interest subvention shall be admissible for any period during which the account remains NPA.
The scheme holds no relevance to the fabrication units that are mostly BHEL’s ancillaries since a majority of the industries are gradually turning into NPAs and the properties are being auctioned by banks.
“The present plight of the struggling ancillary units is that the promoters are not able to obtain stay order from the courts in time for the notices sent by banks under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act,” Rajappa Rajkumar, president of BHEL Small Industries Association, said.
For instance, the banks give only 15 days for the industries that have defaulted on payment to settle the dues. But, the scope for legal recourse does not exist since the cases are not taken up for hearing within the deadline period.
Unfortunately for the MSMEs in Tiruchi region, neither the Central Government nor the State have shown any inclination to sustain their survival.
Desirable outcomes can be expected if representatives of small and medium industries’ associations find a place in the expert committees constituted by the State Government with the specific mandate of bailing out the struggling units. ‘For some reason, it is not happening in Tamil Nadu,’ Mr. Rajappa Rajkumar said.
Sanction of additional loans means precious little for the fabrication industries in the absence of adequate orders. The units that had taken additional loans find themselves in a piquant situation since it has only meant expansion of liability with a lengthier repayment period, with no scope for settling the loans. ‘It is tantamount to slow and agonising death,’ Mr. Rajappa Rajkumar explained.
Unless the BHEL, which has the capability to undertake projects for defence and railways, becomes pro-active in securing orders, there will be no turnaround for the MSMEs in the region, he emphasised.