Tamil Nadu Small & Tiny Industries Association (TANSTIA) has sought a decrease in interest rates for MSMEs from the forthcoming Budget. The cyclone hit state has urged the government to help tiny industries cope up with the losses incurred by Vardah by way of a single rate of interest, and that too in single digit.
“We want rate of interest in single digit for the development of small and tiny industries. The state has been hit hard by the cyclone Vardah causing a loss of about 60k crore. The decrease in interest rate may give a boost to this sector,” TANSTIA President C Babu said.
The association also requests for a speedy implementation of the Small Factories Act. The bill is expected to create an ecosystem for small businesses. It seeks to exempt small units with less than 40 workers from tedious compliance of 14 labour laws including Employees’ Provident Funds & Miscellaneous Provisions Act and Employees State Insurance (ESI) Act.
Keeping the Make in India initiative in mind, government had mandated 20 per cent procurement of raw materials, with effect from April of 2015, by PSUs from MSMEs. Even after the mandate, PSUs fail to procure the said amount. TANSTIA has demanded for a monetary committee for its successful implementation.
TANSTIA also seeks an increase in dumping duty, and at the same time a relaxation in import duty. This will not only help compete against cheap Chinese imports but also ease production cost within India. Raw material prices also keep fluctuation throughout the year which disrupts a smooth flow of supply for MSMEs. Babu urged the rates to be stabilised on a yearly basis.
Babu also said that central excise limit should be increased to Rs 2 crore for the development of micro industries. The basic exemption limit for excise registration is currently Rs 1.5 crore for SSIs.
Apart from these, Babu also sought incentives for areas like tourism and connectivity of logistics. The state’s larger cities have mainstreamed the attention of MNCs, but when it comes to the smaller ones, they remain secluded. Infrastructural development of smaller towns will not only solve the connectivity issue for movement of goods, but also attract tourists to the untouched areas, said Babu.
Tamil Nadu is responsible for production of about 80 per cent of match boxes manufactured in India. The state also has the largest tourism attraction across nation.
