VIJAYAWADA: In a boost to struggling Micro, Small and Medium Enterprises (MSMEs), Chief Minister YS Jagan Mohan Reddy on Friday gave them Rs 450 crore — the first tranche of the Rs 905 crore industrial incentives that are due to them. The payment is part of the government’s Rs 1,110 crore ‘ReStart’ package for MSMEs.
Addressing district Collectors and MSME representatives through videoconferencing, the Chief Minister said that after the agriculture sector, MSMEs are the biggest job providers at the local level. “If we cannot save the MSME sector, unemployment will grow,” he observed, and emphasised the need to hand-hold MSMEs with a humane approach.
Though the state’s economy is in bad shape, MSMEs are being helped because their problems are severe, Jagan said, adding that the rest of the industrial incentive dues to MSMEs will be cleared on June 29.
He took a dig at the previous TDP government, saying though it promised industrial incentives, they were not paid in time, and piled up for years. In 2014-15, Rs 43 crore was kept pending, in 2015-16, dues were Rs 70 crore, in 2016-17, the amount rose to Rs 195 crore, in 2017-18, it was Rs 207 crore, and in 2018-19, industrial incentive dues were Rs 195 crore, he pointed out. “In five years, a total of Rs 828 crore remained unpaid. We are clearing them along with the 2019-20 dues, that is a total of Rs 905 crore,” he said.
To help MSMEs that suffered due to the lockdown, the government announced a waiver of fixed electricity charges against contracted maximum demand for MSMEs for three months (April to June), which amounts to Rs 188 crore. “It will benefit 97,428 MSMEs in the state and the more-than 10 lakh employees dependent on them,” Jagan said.
The government is also setting up a Rs 200 crore corpus fund to facilitate working capital loans at a lower interest rate (6-8 per cent), to help MSMEs deal with their liquidity crisis. “Loans of between Rs 2 lakh and Rs 10 lakh will be facilitated with a six-month moratorium and three-year repayment period,” he said.
“We decided that hereafter, government entities will buy 25 per cent of goods and services from micro and small entrepreneurs, of which 4 per cent will be from SC/ST-operated units and 3 per cent form women. Payments will be made within 45 days,” he added. The government has identified 360 items to be procured from MSMEs.
Officials to liaison with MSMEs, assess needs
The Chief Minister told Collectors to have one of the three Joint Collectors in the district liaison with MSMEs. He also directed them to conduct a ‘skill gap’ study to assess the MSMEs’ requirements and locally-available talent, so the needed skilled personnel can be found with the help of village volunteers and village secretariats