VIJAYAWADA: Chief Minister YS Jagan Mohan Reddy on Thursday launched ‘Dr YSR Navodayam’, a scheme for giving a lifeline to thousands of ailing micro, small and medium enterprises (MSMEs) in the State through a one-time restructuring of loans. Under the scheme, Rs 3,500 crore will be provided to about 85,000 MSMEs.
Explaining the importance of the scheme, Finance Minister Buggana Rajendranath Reddy said that the State government was giving top priority to MSMEs, the second-largest employment provider after agriculture in the country.
“The scheme will benefit MSMEs in a big way. The government will support and monitor the implementation of Reserve Bank of India’s (RBI) one-time restructuring (OTR) of MSME loans so that all the eligible units are covered for OTR of accounts up to March 31, 2020,’’ the minister said.
Speaking to the media at the Secretariat after participating in the launch of the scheme, Buggana said for various reasons such as e-marketing problems, challenges in adoption of new technologies and expansion plans, MSMEs were facing financial problems and the managements were finding it difficult to run the shop and repay loans, which are turning into non-performing assets (NPAs).
Against such a backdrop, the government has decided to launch the scheme, under which a meeting will be organised in all the districts every month under the chairmanship of the district collector. District Coordination Committee members, District Industries Promotion Committee members and bankers will attend the meeting, which will identify the problems of MSMEs.
MSMEs contribute 8 per cent of the country’s GDP. In Andhra Pradesh, there are 1,00,629 MSMEs with an investment of Rs 30,528 crore, employing 11 lakh people.
As many as 85,070 MSME units are eligible for the OTR of loans worth Rs 3,493 crore.
Buggana said that the government would provide support to MSMEs by reimbursing 50 per cent (not exceeding Rs 2 lakh per account) of the auditor’s fee for the preparation of Techno Economic Viability (TEV) report.
“MSMEs have to pay a huge amount of fee to the auditors for the preparation of TEV report. Under Dr YSR Navodayam scheme, the government will reimburse 50 per cent (not exceeding Rs 2 lakh) of the fee amount,” the minister asserted.
Taking a dig at the previous TDP government for not making use of the OTR scheme despite the RBI circulating a note in January, the Finance Minister alleged that the previous government in 2014-15 released Rs 2,000 crore to MSMEs on a selective basis.
“But, our government is giving priority to those MSMEs, which are under OTR of loans,” the minister said.