Amid COVID-19 crisis, AP CM releases second tranche of Rs 512.35 crore to bail out MSMEs

 “Only when the industries believe that the government is trustworthy, investment will come and credibility of the state will improve. We will do everything to make it happen,” he assured.

Published: 29th June 2020 06:12 PM  |   Last Updated: 29th June 2020 06:12 PM   |  A+A-

Andhra Pradesh CM YS Jagan Mohan Reddy

Andhra Pradesh CM YS Jagan Mohan Reddy (Photo| EPS)

By Express News Service

VIJAYAWADA: Chief Minister YS Jagan Mohan Reddy on Monday released Rs 512.35 crore in the second tranche of industrial incentives to MSMEs as part of the Rs 1,168 crore ReSTART package that includes Rs 827.5 crore incentives kept pending by the previous TDP government since 2014-15.

He announced that next year the industrial incentive of nearly Rs 1000 crore due to spinning mills will be cleared and like that every year the focus will be on one sector to help them recover, stabilize and progress.

Addressing representatives of MSMEs across the state through a video conference, he said now they have extended financial help of Rs 1,100 crore to MSME sector to bail them out and likewise they will focus on different sectors in a systematic manner and clear the pending dues while helping them to recover from the economic crisis.

 “Only when the industries believe that the government is trustworthy, investment will come and credibility of the state will improve. We will do everything to make it happen,” he assured.

The Chief Minister said to help the MSME sectors, which provide more jobs to youth after the agriculture sector, the ReSTART package is being implemented.  He said 97,428 MSME units including 72,531 micro, 24,252 small and 645 medium units provide employment to nearly 10 lakh people. Rs 450 crore was released as the first tranche in May and now 512.35 crore released as second tranche will help stabilize the MSME units and help them recover from the bad phase they have been going through, he explained.

“Only when the government extends handholding to these MSME sectors, they will sustain and in turn lakhs of people dependent on them will benefit and feel secure of their livelihoods. MSMEs will help in providing employment to those with qualifications like ITI and diplomas,” he observed.

Pointing out that the previous government had kept more than Rs 800 crore of industrial incentives pending since 2014-15, the Chief Minister wondered if such was the situation, how would those units sustain themselves. “Hence we have cleared the old dues and released the current incentives. Further, to stabilize the situation with MSMEs which have suffered due to the COVID-19 crisis, Rs 188 crore worth Electricity Fixed Demand Charges for the months of April, May and June were waived,” he explained.

Further, a fund of Rs 200 crore was kept with the Andhra Pradesh State Financial Corporation (APSFC) to facilitate working capital loans of Rs 2 lakh to Rs 10 lakh for MSME units at the lower interest rate of 6-8 percent for meeting their liquidity needs, he said and added that apart from a six-month moratorium, the loan repayment period has been fixed at 3 years.

“The government will also procure 25 percent of its annual requirement of 360 types of different goods and services from the micro and small enterprises of which 4 percent will be procured from SC, ST run units and 3 percent from women entrepreneurs. Most importantly, all bills will be cleared in 45 days,” he explained while exuding confidence that such measures will help the MSME sector and put the state on a development path.

Speaking on the occasion, Minister for Industries Mekapati Gautham Reddy said the release of Rs 962 crore to MSMEs during the COVID-19 crisis has come as a boost in the arm to those units. 54 percent of the beneficiaries are women entrepreneurs and 31 percent are SC, ST entrepreneurs. "In tune with the government's farmers’ first policy, 128 food processing industries stand benefited, which has helped farmers and workers also," he said.

Representatives of MSMES interacting with the Chief Minister heaped praise on the state government and said they had lost hope in getting the old industrial incentives, but surprisingly the CM had cleared them and infused a new lease of life to the sector. “What you did has helped me and several women working in micro industrial units. At a time when we lost hope, you have rekindled it,” said Jayakumari, an entrepreneur from Anantapur.

M Nagarathnam, another entrepreneur from Anakapalli in Visakhapantam, said industrial incentives and waiver of fixed demand charges have helped them stabilize the situation and pay wages to employees. “It was like a lifesaver during the COVID-19 crisis. We are grateful. Now, even the bankers are again showing respect to us. It is all thanks to you,” she told Jagan.


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