Coimbatore: Interest on bank loans for micro, small and medium enterprises (MSMEs) should be capped at 8%, with a further 2% interest subvention for small industries that pay GST promptly, industrial associations here said in a letter to finance minister Nirmala Sitharaman.
The Federation of Coimbatore Industrial Associations (Focia), which consists of 19 associations, wrote to the minister on Friday with a set of proposals for the Union Budget that will be announced next year. The associations believe the measures will help MSME’s grow and will incentivize them to upgrade to cutting-edge technology to compete globally.
Their first suggestion was to increase government expenditure on research and development, which stands at 0.65%, much lower than the global spend of 2.27% and a fraction of countries like Korea that spend 5%. “We request the government to establish at least 100 marketing centres of industrial products in all major cities, so that MSMEs can own a showroom or office to market their products,” said S Surulivel, president of the Railway Suppliers Association.
Focia also urged the government to develop or support formation of at least 10,000 industrial estates with a minimum of 100 plots over the next five years. “They must also extend financial support and subsidy to MSMEs to purchase industrial plots and to construct industrial sheds,” said Raveendran, president of the Coimbatore Compressor Industries Association.
“The foremost support from the government to strengthen MSMEs will be to ensure timely payments by corporates and large companies, including government enterprises. The government should blacklist companies, even government enterprises, if they fail to clear payments to micro and small enterprises within 30 days,” added Surulivel.