RBI urged to intervene as power crisis hits micro small and medium enterprises

C Shivakumar

Chennai:

Reserve Bank of India has been urged to issue instructions to all banks in Tamil Nadu to offer package by way of rescheduling the payments of micro small and medium enterprises as nearly 79 units in the state are falling sick each day due to the power crisis in the state, according to the director of Micro Small and Medium Enterprises (MSME) Development Institute S Sivagnanam.

Speaking to Express after a press conference to announce the date for seminar cum exhibition Entreprenuership 2013 on March 1, Sivagananam said that as per the Union Ministry of MSME, the daily industrial production in the state has gone down to Rs 6,000 crore this year from Rs 1,500 crore last year.

He said power crisis has forced MSME players to keep the workforce beyond scheduled time till the restoration of power which has increased the cost of production manifold, besides creating chaos and unrest among labour force.

He said using diesel for standby power source has mounted the cost of production and the product manufacture by the state based MSME have become unviable and less competitive.

The power crisis has also reduced the production capacity of many units. “On an average, a unit runs to a capacity of 80 per cent but after the power crisis industry output is down to 30-40 per cent. This crisis has further mounted the problem of repayment of loans,” said Sivagnanam.

In a letter to RBI, Sivagnanam has said that majority of units are tending towards industrial sickness. “It is the right time RBI takes swift action by extending liberal support to MSME players by way of rescheduling their outstanding loan replayment through the bank networks in the interest of state economy,” he said.

“Such a timely intervention will prevent closure of units due to sickness. This will also prevent the bank non performing assets position,” he added.

He said the industrial production emerging from micro, small and medium enterprises in the state has shown declining trend in the last two years due to power crisis and subsequently it ranking has slipped down from the number one position.

Box:

Chennai:

In a bid to reach out to rural entrepreneurs, Micro Small and Medium Enterprises (MSME) Development Institute is organizing a seminar-cum-exhibition Entreprenuership 2013 from March 1.

The two-day event which is organized in association with Puthia Thalaimurai Foundation will be inaugurated by Tamil Nadu Governor Dr Rosaiah. “We expect around 2,000 delegates from across the state to attend the event. We will be offering them skills training,” said MSME Development Institute director S Sivagnanam and Puthiya Thalaimurai Foundation secretary D V Venkatagiri. Interestingly, the skills training will not focus on power intensive sector, said Sivagnanam.