The Reserve Bank of India has been urged to issue instructions to all banks in Tamil Nadu to reschedule loan repayments of micro small and medium enterprises (MSME) as nearly 79 such units in the State are falling sick each day due to power crisis, according to the director of Micro Small and Medium Enterprises Development Institute S Sivagnanam.
Speaking to Express after a press conference to announce the date for a seminar cum exhibition, Entrepreneurship 2013, slated to be held on March 1, Sivagananam said that as per the Union Ministry of MSME, the daily industrial production in the State has gone down steeply.
He said power crisis has forced MSME players to keep the workplace open beyond scheduled time till the restoration of power, which has increased the cost of production manifold, besides creating unrest among the labour force.
Also, using diesel as a standby power source has raised the cost of production and made the end product less competitive, he said.
The power crisis has also reduced the production capacity of many units. “On an average, a unit runs at 80 per cent capacity, but after the power crisis, industry output is down to 30-40 per cent. This crisis has further aggravated the problem of repayment of loans,” said Sivagnanam.
In a letter to RBI, Sivagnanam has said that most units are turning sick. “It is time RBI takes swift action by extending liberal support to MSME players by way of rescheduling their outstanding loan EMIs,” he said.