Andhra CM releases first instalment of Rs 450 crore to MSMEs to bail them out of crisis

Taking a dig at the previous TDP government, Jagan said though industrial incentives were announced by the previous regime, they were not paid in time, and year after year, they kept on piling up

Published: 22nd May 2020 03:48 PM  |   Last Updated: 22nd May 2020 03:48 PM   |  A+A-

Andhra Pradesh CM Jagan Mohan Reddy

Andhra Pradesh CM Jagan Mohan Reddy (Photo | EPS)

By Express News Service

VIJAYAWADA: Extending a helping hand to the MSME sector to bail them out of a crisis, Chief Minister YS Jagan Mohan Reddy on Friday released Rs 450 crore, the first tranche of Rs 950 crore industrial incentives due to them. It is part of the Rs 1,110 crore Re-Start package for MSMEs.

Addressing the district collectors and representatives of MSMEs through a video conference, he said after the agriculture sector, the MSME sector is the major job provider at the local level. “If we cannot save the MSME sector, unemployment will only grow,” he observed and stressed the need for a handholding approach with a humane face for MSMEs.

Pointing out that the state economy is in bad shape, the Chief Minister said in spite of that, they have decided to help MSMEs, as they understood their problems are more severe. “We have decided to clear Rs 905 crore industrial incentive dues to MSMEs in two installments and released Rs 450 crore today and the balance will be released on June 29,” he said

Taking a dig at the previous TDP government, Jagan said though industrial incentives were announced by the previous regime, they were not paid in time, and year after year, they kept on piling up. “It is a classic example of promises not kept, which created problems for MSMEs,” he observed.

Elaborating on the pending dues that were left uncleared by the TDP regime, the Chief Minister said in 2014-15, Rs 43 crore were kept pending, in 2015-16, dues were Rs 70 crore, in 2016-17, the dues were Rs 195 crore and in 2017-18, they were Rs 207 crore and in 2018-19, the industrial incentive dues were Rs 195 crore. “That is a total Rs 828 crore in five years, which remained unpaid. We are clearing them along with 2019-20 dues, that is a total 905 crore,” he said.

To help MSMEs which suffered due to closure during COVID-19 lockdown for two months, to get back on their feet, the state government announced waiver of the fixed electricity charges against contracted maxim demand for MSMEs for a period of 3 months from April to June, which amounts to Rs 188 crore. “It will benefit 97,428 MSMEs in the state and over 10 lakh employees dependent on them,” Jagan said.

The government is also setting up Rs 200 crore corpus fund for facilitating working capital loans at lower interest (6-8 percent) as part of the ReSTART package, to help the MSMEs deal with their liquidity crisis. “Loans to the tune of Rs 2 lakh to Rs 10 lakh will be facilitated with 6 months moratorium and 3 years repayment period,” he said

Jagan said when they were contemplating how best to help MSMEs survive and develop, it was suggested to let the government procure goods and services from them. “We decided that hereafter, government entities would procure 25 percent of goods and services from Micro and Small Entrepreneurs, of which 4 percent will be from SC, ST operated units and 3 percent from women entrepreneurs. More importantly, payments for the goods and services procured will be made within 45 days,” he explained.

Emphasizing the need for better coordination between officials and entrepreneurs for the development of MSMEs, the Chief Minister asked the district collectors to get one of the three joint collectors in the district to liaison with MSMEs. He promised that all cooperation will be extended by the state government.

Pointing out the peculiar situation MSMEs are facing with 2.8 lakh migrant workers leaving for their home states and another 1.3 lakh returning home, Chief Minister directed the district collectors to conduct ‘skill gap’ study to assess the requirement of MSMEs and locally available talent, so the needed skilled personnel can be found with the help of village volunteers and village secretariats and if they are willing can be suggested to MSMEs as a replacement.

On the occasion, he also directed the officials to focus on 75 percent reservations for locals in the industrial units and reminded them that an exclusive act was brought in for this purpose. “Work is underway for setting up 25 skill development colleges, one each in 25 parliamentary constituencies in the state, where skills of youth will be improved and they will be made industry-ready,” he said.

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