Telangana Government
has already put in place transparent, accountable, progressive and globally
acclaimed industrial policy through TSiPass, T-Hub etc. Its inclusive industrial
growth agenda required that the MSEs that actually oil the wheels of innovation
shall be put on even keel with non-discriminatory promotional framework.
This has propelled the
Industries Minister to adequately and appropriately respond to the call of the
MSME Associations in the State that bee-lined to him to pour out their woes
with the bank’s hurried actions in declaring them as NPAs only to sell of their
silver that included their only dwelling house!!. KT. Rama Rao, Minister for
Telangana deserves kudos for taking the initiative of reaching the Governor RBI
directly – the first ever such effort in the Federal Republic of India to bat
for the MSEs’ issues.
Several micro and small
entrepreneurs suffered setbacks due to self-inflicted injuries. But there are
many others who suffered at the hands of the banks. There were cases of
under-financing, untimely release of credit, wrong application of interest,
failure to handhold at the right time etc.
When the entrepreneurs
came with their statements of accounts and other particulars and the way their
requests were turned down by banks under the ruse that they defaulted in
payment of principal or interest for 90 days, the Minister wanted the
Department of Industries to inquire into the true state of affairs in the light
of RBI’s instructions and brief him.
The Minister realised
that the entrepreneurs had genuine grievances and the Banks have been putting
in their own justification for the punitive measures taken against the MSEs. He
sized up the issues in four parts: 1.State’s responsibility to bail out the
enterprises that are falling or tending to fall sick through an effective
policy; 2. Ambiguities in RBI instructions and 3. Ambivalent attitude of the
bankers and 4. Banks’ non-compliance of the RBI instructions
The Minister’s first
salvo against the bankers was on the lack of integrity of the data they produce
at the SLBC that has been blocking a meaningful review of the progress of
industrial growth. Banks declared even Rs.5000 loan under manufacturing
category!! In the same breath banks declared that they had no units to show
under manufacturing under the targets for PM Task Force. He escalated this
issue to the corridors of RBI for ensuring data integrity with the banks
showing them the data placed before the government by the Banks.
For example, quarter ending
31st March, half-year ending 31stt March and year ending 31st
March in the same year unfolded three sets of figures in terms of number of
accounts, and so is the data relating to the figures of sick, potentially
viable, and viable enterprises. SLBC has invariably been furnishing only data
relating to the number of accounts and not number of units in spite of specific
request.
|
SLBC report
|
MSEs
|
Medium units
|
Total MSMEs
|
|
April 2015
|
548107 (as on 31.3.15)
|
3834 (as on 31.3.15)
|
551941 (as on 31.3.15)
|
|
July 2015
|
508313 (as on 31.3.15)
|
2723 (as on 31.3.15)
|
511036 (as on 31.3.15)
|
|
April 2016
|
687537 (as on 31.32015)
|
93717 (as on 31.3.15)
|
781254 (as on 31.3.15)
|
Source: SLBC to the
Empowered Committee of SLIIC
|
Category/quarter ending
|
Sick Units
|
Potentially Viable
|
Viable under Nursing
|
TEV studies
|
|
March 2015
|
25398 (3.26)
|
966 (12.20)
|
274 (14.4)
|
24920 (2.48)
|
|
June 2015
|
8471 (7.26)
|
903 (8.1)
|
142 (10.40)
|
8096 (4.13)
|
|
Sept 2015
|
7565 (10.72)
|
646 (6.9)
|
135 (6.08)
|
7287 (6.81)
|
In order to simplify
the RBI guidelines on declaration of NPAs and pursuing legal actions against
non-wilful defaulters he sought a check list for compliance by banks that would
bring about transparency.
The Minister also
requested the RBI for necessary support to the Corporate Fund for establishing
the Industrial Health Clinic (IHC) by classifying any contribution to such fund
as equivalent to Priority Sector Lending. Telangana Government would be the
first state to establish such Clinic with a view to supplement and not supplant
responsible and responsive institutional finance support to the MSEs as a SPV
under the TSIDC.
*The views are
personal. The author is an economist and SME Consultant.
http://knnindia.co.in/news/newsdetails/msme/industrial-health-clinic-to-the-mses-in-telangana
30.8.2016
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