Small and Medium Enterprises (SMEs) have been asked by the federal government to restructure their loans and make them readily available to help industrial waves react to the negative effects of the Govt-19 strike.
Sandeep Belsare, president of the Pimpri-Chinchwad Small Industries Association, met Union Finance Minister Dr Bhagwan Karat on Sunday and urged for a complete funding package to help revive the SME sector.
In his note, Belsare said all businesses in Maharashtra were closed for two months last year during the nationwide lockout. As a result, many industries have suffered losses without being able to return to normal production levels. Even though the factories were closed, the banks did not offer any concessions and they still had to pay off their debts.
“We have asked the Union Minister to ensure that our interest and debt for those two months are repaid,” Belsare said.
Another thing that Belsare raised in his letter was that most nationalized banks are reluctant to lend to this sector. Most small and medium enterprises are banked with private banks or cooperative banks whose interest rates are high. “The minister was informed about this and we asked him to come up with a new policy targeting our sector,” he said.
The MSME, Belsare said, could not reduce it because of the growing problem of non-performing assets and the recession associated with large economic conditions. The special loan package of the Central Government is mainly provided by the nationalized banks, which many small and medium enterprises are unable to avail. The Minister should ensure that the schemes of the Central Government are made available to both private and co-operative banks. This will help revitalize small and medium enterprises, ”he said.
The department has asked the government to take action against large companies that do not pay their vendors within 45 days of being forced to do so. Belsare said the GST portal should come up with an appropriate mechanism to integrate with the MSMED Act so that the erring companies will be flagged off. The department has also asked the government to come forward to control the prices of raw materials.