Small-scale industries, milk producers in Bengaluru run into tough times

Published: 19th November 2016 01:42 AM  |   Last Updated: 19th November 2016 07:48 AM   |  A+A-

Express News Service

BENGALURU: Micro and small industries in the state, numbering about 5,60,000, are facing a cash crunch. These small businesses -- across sectors like food, engineering, automobiles, electronics, garments and textiles -- need at least `5 lakh per week to meet production demands and to pay workers. But the withdrawal from cash credit accounts (C C accounts) has been limited to 50,000 per week. These industries cater to the global markets and are unable to meet the demands.

A Padmanabha, president of Karnataka Small Scale Industries Association said, “Take the food industry for example. They walk into the markets and get ingredients and commodities. Though you support demonetisation, there are curbs on withdrawing your own money. We have written to the RBI and the finance minister to allow us to withdraw at least `5 lakh per week.”

“They may have bank accounts but not debit cards and credit cards. Also, all places where they make these purchases need to have Point of Sale machines (POS). There is also delay in payment from customers. Some of the industries haven’t given salaries to their workers. About 40 per cent of workers don’t have bank accounts. Those who have got cheques haven’t been encashed. We also have migrants from Odisha, Bihar, UP who have no government ID proofs,” he added.

Milk producers in the state
Around 23 lakh farmers are a part of the Karnataka Milk Federation (KMF), and at any given point of time, only nine to ten lakh people sell milk as it is done on rotation. Among them, around two lakh farmers don’t have bank accounts.

Dr T Gurulingaiah, MD, Mandya Milk Union, said, “The only alternative is to make payments directly to the accounts of the farmers. We are requesting the banks to do that.”
The KMF is a milk surplus organisation with 26 lakh litres of milk surplus every day. The farmers also get an incentive of `4 on every litre of milk they sell to KMF, which is  deposited only in their bank accounts. So those with no bank accounts are losing out on the incentive.

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