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A 50-year-old Balakumar was looking forward to 2020 as he had international business offers coming his way. The proud owner of ‘Praveen Machine Works’, which specialises in spare parts for pumps, had expected a good turnover last year.
In March 2020, however, his life came to a halt as COVID-19 downed the shutters of his company.
When he restarted his business in January 2021, his ten-member crew reduced to just himself and his son.
The story of almost every MSME owner in Tamil Nadu’s Coimbatore is quite tragic.
Raw Material Costs Skyrocketing
While political parties are campaigning across the state promising subsidised loans, interest waivers and investment, the sector still awaits reform.
35% of MSMEs (Micro, Small & Medium Enterprises) in Tamil Nadu are in the verge of shutting shop. Of the 1.5 lakh MSME units in Coimbatore, 70% are reeling under heavy losses and unemployment.
MSME owners pointed out that the biggest concern has been rising raw material prices to the tune of 55%, that has taken a huge hit on their production.
“Initially, when I bought the metal required to make a product, it cost me about Rs 50.
Today, it is about Rs 75 and this rise has happened in four months,” said Jeevanandan, an MSME owner.
Several owners have mortgaged jewellery, agricultural land, and property to manage the increasing costs.
“When we restarted business from January due to the coronavirus lockdown, labourers were not coming forward to work and we have not been able to pay them wages like before,” Balakumar said.
What Political Parties Have Promised
While the sector has been facing huge losses, all political parties have canvassed for support in Coimbatore promising development.
During his visit to Coimbatore, Prime Minister Narendra Modi spoke about how the MSME sector is crucial for building ‘Atmanirbhar Bharat.’ He assured that the Centre will work in unison with the state government to offer incentives and schemes to help improve the MSME sector. He pointed out that emergency credit guarantee scheme, the biggest fiscal component of the Rs 20 lakh crore Atmanirbhar Bharat Abhiyan package, was announced by Finance Minister Nirmala Sitharaman in May to mitigate the distress caused by the lockdown due to COVID-19.
But data shows that there have been only 50 lakh beneficiaries of the seven crore units in the country.
Recently, Tamil Nadu Chief Minister Edappadi Palaniswami unveiled the state MSME policy 2021, assuring two lakh crore worth investment and jobs for 20 lakh people. Industrialists said, while investment is a welcome move, this scheme doesn’t benefit those who are already facing severe losses in the business.
Congress’ Rahul Gandhi met with MSME workers and owners and even took up their plight in the Parliament. Several leaders of DMK met with the MSME owners and promised to set up an MSME welfare board.
“More than 50,000 MSMEs were shut down even before COVID in Tamil Nadu.
Now the numbers must be more. Government has to reach out to MSMEs and small scale industries because these are labour-intensive industries and we can generate a lot of employment. A lot of industries are dependent on this as well,” DMK MP Kanimozhi told The Quint.
Demands From MSMEs to TN Parties
Members of the Coimbatore district division of Tamil Nadu Association of Cottage and Tiny Enterprises (TACT) told The Quint that their vote will go for the party that offers them localised schemes assuring a stable future.
The association demanded that interest rates be brought down to 5%, an exclusive MSME welfare board be set up, reduction of raw material costs, and a uniform GST rate be set.
The Confederation of All India Traders (CAIT) has written a letter to Prime Minister Narendra Modi seeking his intervention “to simplify GST taxation system and streamline the e-commerce rules and policies to save the domestic trade from the clutches of malpractices of big e-commerce companies”.
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