Chandan Srivastava
Just consider this scene: You are a small or medium scale businessman, you have a business of making shoes or bags for school children. Your costs are going up because the cost of raw materials is going up and the money you get for the service or goods you sold is stuck in the hands of the buyer.
It is difficult for you to get institutional loan because your business status is very small and banks are questioning that you are already indebted to us, so what do you have to show as collateral which we believe Make sure that you will repay the new loan amount within the stipulated time frame? What is the first thing you will do if you get stuck in such a state of business?
To get the money stuck in the hands of the buyer, you go to the forum set up by the government, but you come to know that there is a queue of lakhs of businessmen like you, do not know when your number will come in this queue? You also get to know that there are many of these businessmen who are queuing up to get their stuck money, whose money is themselves owed to government departments and ministries.
In such a situation, if someone says that the government is paying full attention to you, you are actually one of the priorities of the government’s economic policy, then will you be able to believe this easily? You will find yourself a lewd joke about being included in the priorities of the government’s economic policies and, perhaps, you may even get angry at such a joke.
Condition of MSME Sector
The huge MSME sector of the country is in a similar condition at this time, which is facing the new wave of Corona. Yes, you understood absolutely right – here we are talking about the same MSME sector, which contributes 30 percent to India’s GDP, in which 11 crore people of the country are employed, most of which (more than 50 percent) units are in India. These are concentrated in rural or rural areas, and the sector which accounts for 40 percent of the total exports from the country.
Obviously, then this sector is very important for realizing the dream of ‘Self-reliant-India’ of the present government. The government says that it has taken many measures to promote this sector and promoting the MSME sector is one of its priorities. But, this saying and doing of the government has no match with the ground reality.
For example, remember some seven-eight months from now – then Finance Minister Nirmala Sitharaman announced a relief-package to the MSMEs sector, which were downing their shutters amid the lockdown aimed at stopping the second wave of COVID-19. prioritized.
In the last week of June (2021), it was announced that the loan limit to the units of this sector under the Emergency Credited Line Guarantee Scheme (ECLGS) has been increased by 50 percent to Rs 4.5 lakh crore. (Remember, in the self-reliant-India campaign package of Rs 20 lakh crore that was announced in May of the year 2020, the limit of loan given to the units of MSME sector under ECLGS was kept at 3 lakh crore). A new scheme was also announced in which 25 lakh small units of this sector were told to give loans of Rs 1.25 lakh at a convenient rate of interest.
The definition was also changed keeping in mind that small and big units of the MSME sector should get loans according to their status and requirement. According to the new definition, units with investment up to Rs 50 crore and turnover up to Rs 250 crore were kept under medium category enterprises. Small enterprises with a total investment of Rs 10 crore and a turnover of up to Rs 50 crore, and units with an investment of Rs 1 crore and a turnover of up to Rs 5 crore will be given the status of micro enterprises. Given.
After this initiative to change the definition of units of the MSME sector by increasing the loan amount and easing the conditions for easing the loan, what was the impact among the small and medium scale businessmen, just imagine. Businessmen from the MSME sector were on the streets within six months of the announcement.
In the month of December last, AICA (All India Council of Association of MSMEs), an organization of Micro, Medium and Small Enterprises, called for a one-day strike by the traders of MSMEs sector. The businessmen are demanding that the government should get back the money we have in the hands of the buyers. To curb the inflated cost of raw materials and make it easier to get institutional credit.
The question of outstanding balance and increased cost expenses
Before the one-day strike in December, AICA had publicly demanded from Prime Minister Narendra Modi that due to the increase in the prices of raw materials, it is becoming difficult for the units of the MSME sector to survive in the market competition, so such measures were taken. Go that the raw material prices should come down to the same level where they were in the month of April 2020.
It was revealed in the news quoting AICA that from the month of April of 2020 to October of 2021, the prices of many raw materials used by the MSME sector increased continuously. For example, aluminum ore prices rose by 154 per cent to Rs 270 per kg from Rs 106 per kg.
Similarly, the price of Copper increased by 119 per cent from Rs 355 to Rs 779 per kg. The price of kraft paper has gone up by 110 per cent and its prices have gone up from Rs 20 per kg to Rs 42 per kg. The same is the case with plastic (engineering) whose prices have gone up by 100% from Rs 70 per kg to Rs 140 per kg.
As far as the dues of the MSMEs sector units are stuck in the hands of the buyers-the situation is getting worse. According to the facts of the Government Samadhan Portal, set up to deal with the delay in payment to the units of the MSME sector, till the first fortnight of January this year, the number of applications received for the resolution of the delay in payment to the portal is more than 1 lakh. Had gone up (total 1,00,203) and adding the amount mentioned in these applications together, it would be seen that a total of Rs 26,210.86 crore of the product sold by the small traders is stuck in the hands of the buyers.
Keep in mind that the Samadhan Portal was launched in the month of October 2017. This step was taken under the Micro, Small and Medium Enterprises Act (2006). According to the requirements of this Act, Micro and Small Enterprise Facilitation Councils (MSEFCs) have been formed in the states, where businessmen can apply for resolution of complaints if there is a delay of 45 days in payment. This council has to resolve the application within 90 days from the date of receipt of the application. So, more than 1 lakh applications for delay in payment have come in the last four and a half years i.e. more than 20 thousand applications every year.
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According to the data recorded on the Samadhan portal, out of these applications, only 12,099 cases (12 per cent) were resolved by MSE Facilitation Councils (MSEFCs), i.e. traders with stranded money could get a total amount of Rs 2,084.18 crore. Till the first fortnight of January, an amount of Rs. 1,400.99 crore of about ten thousand (total 9,737) applications were paid by mutual conciliation. A total of 20,974 applications were rejected by the council. The remaining 57,392 (57.2 per cent) i.e. more than half of the applications are yet to be resolved.
If you want, you can be surprised that the names of many ministries and departments, public sector i.e. PSU units, railway zones, railway divisions, ordnance factories etc. are included in the small businessmen’s money. A total of 18,072 cases of delay in payment of small enterprises are reported in reports quoting data from Samadhan Portal, in which more than Rs 11,000 crore (11,202 crore) is owed to the ministries and departments of the government.
So, if we think about the needs of the MSME sector, then the big challenge before the Finance Minister in the budget is to reduce the prices of raw materials, provide cheap and convenient loans to small entrepreneurs and take necessary measures to return their dues stuck with the buyers. is of.
(The author is a sociocultural scholar)
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