CHENNAI: After being hit by the pandemic and ravaged by the floods, most small and medium enterprises are slowly picking up their business in the state. The enterprises dealing with engineering and chemicals across Chennai are bustling with activity as the order books are full.
However, the impact is not big when it comes to profits. Instead, it is shrinking due to rise in power tariff, property tax, and registration charges. This is expected to play a crucial role in the polls as there are a huge number of MSME owners in the state who demand to bring down these charges.
Rajesh (name changed), a small-medium enterprise owner who has been planning to expand his business, said the power hike has cut down the profit margin by around 15%. Usually, power tariff for SMEs comes about Rs 5,000. Now, it has reached up to Rs 15,000, he said.
“The state hiked the electricity tariff on September 10, 2023. The standard fee for MSMEs was doubled to Rs 550 and the peak-hour fare was hiked by 25%. It was Rs 35 for a KW but was revised to Rs 153,” said Rajesh.
In a double whammy, the property tax was also risen by up to 100%. An entrepreneur said he used to pay Rs 2,000 which is Rs 10,000 now. “Apart from this, I have to pay an additional Rs 3,000 as tax for metro water. Similarly, the professional tax has also increased based on the hike in property tax,” he added.
Some of them said they might favour the BJP as policies like the Emergency Credit Line Guarantee Scheme (ECLGS) played a key role in helping many SMEs survive during the pandemic.
However, many MSMEs defend the rise in power tariff, saying it is cheaper as compared to other states. AN Gireeshan, MD of Avon Seals Pvt Ltd, said it is natural for the state to increase the tariffs.
S Vasudevan, general secretary of Small and Tiny Industries Association said when GST was launched, there were several confusions due to which many errors occurred and now they are bound to pay huge penalties for this. This should have been waived off,” he added.
Another concern is the flood relief amount. Vasudevan said while the state provided relief to industrial estates the centre is yet to release funds.