TNBA urges to stop auctions and strengthen boiler MSMEs

  • Industry News
  • Nov 25,20
The association demanded the case of MSME NPA units in Tiruchi must be given a special consideration as they provided employment, paid taxes promptly and followed other statutory obligations.
TNBA urges to stop auctions and strengthen boiler MSMEs

The Tamil Nadu Boilers Association (TNBA), a body of manufacturers of boiler and boiler components have appealed to the Union Ministries of Finance and MSME to direct banks to stop auctioning properties of MSME units under the SARFAESI Act until the pandemic comes to an end. It also has asked the government to consider Tiruchi manufacturers as a special case and strengthen them.

Expressing concern over banks initiating such action against micro, small and medium enterprises, Rajappa Rajkumar, Treasurer, TNBA in a representation to the ministries, observed that the MSMEs were already facing a severe crisis due to the general recession, policy changes and the lockdown enforced due to the pandemic.

“Many of them were fighting for their very survival and workers were losing jobs. MSMEs were awaiting clear guidelines from the government regarding stressed and NPA units. But at this critical junction, banks have started auctioning properties of various MSME unit under the SARFAESI (The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002) Act,” Rajkumar informs.

In such cases, the only court the borrower can appeal to is the Debt Recovery Tribunal. “But it takes more than a week after paying the requisite fee for the hearing to come up at the Tribunal in Madurai, whereas the bank auction notice gives the MSME units only two weeks, with just 10 working days,” Rajkumar claims.

Under these circumstances, the borrowers are denied their legal right to appeal against the bank action. Hence, the Centre should either direct banks to stop all auctions until the pandemic is over or provide a special channel for appeal, he demands.

Although the MSME sector is considered the backbone of the country in view of the employment opportunities generated by it, proper attention is not being bestowed on the needs of the sector, he regrets.

“The MSME sector in Tiruchi region has been in a crisis for the last four years and the COVID-19 crisis has further aggravated the situation for the NPA units that had provided huge employment for the last five decades,” says Rajkumar.

Promoters who ran the units must be encouraged to form a cluster to take bulk order and distribute among them for coming out of the sickness successfully and early. The case of MSME NPA units in Tiruchi must be given special consideration as they provided employment, paid taxes promptly and followed other statutory obligations.

As they had become sick due to change in government policies and general recession, sanction of additional limits at lower rate of interest or interest subvention must be given.

Tiruchi had been known as one of the best fabrication hubs in South Asia. MSME units had acquired proficiency in fabrication and machining of heavy and large equipment. Educated and highly skilled entrepreneurs had the expertise for complicated jobs, and skilled and efficient labour was readily available. All types of latest welding technology had been developed thorough Welding Research Institute, BHEL, Tiruchi. The Tiruchi fabrication hub had the manufacturing capacity of around seven lakh metric tonnes per annum, he believes.

BHEL Tiruchi had started getting orders. BHEL Ranipet had got good orders for Flue Gas Desulfurisation from thermal plants for the next four to five years. Also, Tiruchi had been identified as a hub for the production of defence components as part of Defence Corridor. Tiruchi MSME units had already formed various clusters for undertaking bulk orders from defence and railways.

Those who wanted time must be permitted one year without interest after receiving an initial payment of 10 per cent of the OTS amount arrived. Those willing to run the unit in the existing form without further investment, by making the OTS, must be sanctioned interest-free working capital term loan, payable in a span of seven years with a moratorium period of one year. Those needing additional facilities must be provided access to equity funds by the government, and further back up by banks. Equity and facilities not exceeding Rs 2 crore must be covered under credit guarantee scheme. The OTS could also be converted into interest-free working capital loan payable in seven years with a moratorium period of one year, Rajkumar states while detailing about their demands.

Related Stories

Policy Regulation
India's exports may hit $ 450B in 2024 amidst Red Sea mishap, says Ashwani Kumar

India's exports may hit $ 450B in 2024 amidst Red Sea mishap, says Ashwani Kumar

The main drivers of merchandise export growth in February include engineering goods, electronic goods, organic and inorganic chemicals, drugs and pharmaceuticals, and petroleum products

Read more
Policy Regulation
DGFT partners with DHL to prepare MSMEs for export in 76 districts

DGFT partners with DHL to prepare MSMEs for export in 76 districts

DGFT has been collaborating with various e-commerce platforms and other service providers to handhold and hold capacity building and training sessions in the identified districts

Read more
Process Equipment
Evonik to cut up to 2,000 jobs globally by 2026

Evonik to cut up to 2,000 jobs globally by 2026

German Chemical Company Evonik Industries, known for its products used in various items including animal feed and Pfizer/BioNTech's COVID-19 vaccine plans to cut jobs by 2026 in order to reduce cost..

Read more

Related Products

Steam Boiler

BOILERS, FURNACES & HEATING ELEMENTS

Ambica Boiler offers a wide range of steam boiler.

Read more

Request a Quote

Flash Tanks

BOILERS, FURNACES & HEATING ELEMENTS

<p>Tecor Boilers Pvt Ltd offers a wide range of flash tanks.</p><div><br></div> Read more

Request a Quote

Flash Tanks

BOILERS, FURNACES & HEATING ELEMENTS

Tecor Boilers Pvt Ltd offers a wide range of flash tanks.


Read more

Request a Quote

Hi There!

Now get regular updates from IPF Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Industrial News on Whatsapp! Enjoy

+91 84228 74016

Reach out to us

Call us at +91 8108603000 or

Schedule a Call Back