BJP, DMK face ire of MSMEs in Tamil Nadu over GST, power tariff hike

The governments led by the two parties in Tamil Nadu and at the Centre have earned the ire of Micro, Small, and Medium Enterprises (MSMEs) for their policies that have hurt the sector badly in the past few years.
Last Updated : 15 April 2024, 01:30 IST
Last Updated : 15 April 2024, 01:30 IST

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Coimbatore (TN): In the industrial belt of Coimbatore and Tiruppur, the DMK and BJP have something in common. The governments led by the two parties in Tamil Nadu and at the Centre have earned the ire of Micro, Small, and Medium Enterprises (MSMEs) for their policies that have hurt the sector badly in the past few years.

If MSMEs in Coimbatore, known as South India’s Manchester, and in Tiruppur, the country’s knitwear hub, are still reeling under the effects of the implementation of demonetization and introduction of GST by the Union Government, the DMK dispensation’s move to increase electricity tariff for commercial establishments only added to their woes.

In Coimbatore, associations representing MSMEs in several sectors say about 40 percent of businesses have closed in the past seven years with many entrepreneurs turning as labourers even as the teething issues in GST continue till day.

“We have been facing crisis after crisis since 2016 and things went downhill during Covid. It was when we were slowly recovering from the losses, the state government increased the electricity tariff. We couldn’t handle the shock because it came at a time when we were already affected due to Centre’s policies,” C Sivakumar of Coimbatore Tiruppur Districts Micro and Cottage Entrepreneurs Association, told DH.

‘Withdraw hike in fixed charges’

Though the peak hour charges have been put on “hold” by the state government after protests from several associations, Sivakumar said it is still a Damascus Sword hanging over the head of the MSMEs. Other demands like withdrawal of the hike in fixed charges and charging MSMEs with less than 12 KW under tariff III A (1) instead of III B haven’t been met so far.

“We want a rollback of the steep hike in the electricity tariff. If it is not rolled back, and peak hour charges we cannot run job units as usual,” Sivakumar added.

‘BJP should formulate policies to save MSMEs’

In Tiruppur, which accounts for over 40 per cent of India’s knitwear exports, the MSMEs say increase in electricity tariff is the “biggest issue” as people have got used to GST.

“About 50 per cent of businesses in the MSME sector have already closed down due to demonetisation and GST. The BJP should also formulate policies for the resurrection of the sector,” M P Muthurathinam, president, Tiruppur Exporters And Manufacturers Association (TEAMA), told DH.

Muthurathinam said the state government, which promised help to the sector in 2021, suddenly went back on its promise and increased the electricity tariff. “How much losses can we offset? The business is down due to reduced purchasing power among the people and how can we handle more losses when we are forced to pay more for electricity?” he asked.

Muthurathinam said the state government has promised to look into their issues after the elections. “We hope for an early resolution, but these issues will have an impact in the elections,” he added.

‘MPs didn’t help’

The associations have given representation on their problems to candidates from major political parties in both constituencies. They also blamed CPI (M) and CPI MPs from Coimbatore and Tiruppur P R Natarajan and K Subbarayan for not raising their issues in Parliament. While Subbarayan is seeking re-election from Tiruppur, the DMK is contesting in Coimbatore.

Principal opposition party, AIADMK, is utilising the “anger” against the BJP and DMK among a section of entrepreneurs to seek votes for it. The party has been accusing the DMK and BJP of “destroying” MSMEs through their policies.

Sivakumar said the job units, which largely consist of five to ten people forming an integral part of the ecosystem across India, are still reeling under the effects of introduction of GST. From 18 per cent, the tax on these units was brought down to 12 per cent, but the sector wants it to be further reduced to 5 per cent.

“We don’t make much money. We should be placed under the minimum slab, and we have been seeking the Union Government’s help in this for the past few years. But the Centre comes up with an excuse that it is the GST Council that should decide on reduction of slab, not the government,” Sivakumar added.

Kovai Power Driven Pump Manufacturers Association (KOPMA) president K Maniraj said the state government addressed only a “couple of their demands” and not all after they drew its attention through a series of protests.

“Every industry in Coimbatore was affected due to the GST implemented by the Centre. The DMK supported us when we opposed GST but has now increased electricity tariff after it came to power. Even units that don’t function all day in a week are forced to pay a huge amount,” Maniraj said.

He added that proliferation of pump sets made in Rajkot in Gujarat in the market here has led to job losses in the pump industry in Coimbatore. “We want all these issues to be resolved,” Maniraj added.

Published 15 April 2024, 01:30 IST

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