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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.
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INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
INDUSTRIAL PRODUCTS FINDER (IPF) is India’s only industrial product portal. Referred to as the ‘Bible’ of the manufacturing sector in India,
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